Asian crude oil prices likely to tumble<\/p>\n
SINGAPORE (Reuter): Asian crude prices are expected to fall
\nthis week, hit by the results of the May buying tenders from
\nIndia and Bangchak Petroleum Plc, traders said yesterday.<\/p>\n
The price decline will not be so much the result of the prices
\nof the tender awards but the crude that failed to be awarded,
\ntraders said.<\/p>\n
India failed to award any Dubai crude, which flattened the
\nbackwardation in the Dubai paper market to near contango, while
\nBangchak did not award any Oman, shaving five cents off the
\ndifferential.<\/p>\n
While a cut in the Dubai\/Oman spread this week might help
\nsupport Oman's spot market differentials, the Dubai backwardation
\nwas disappearing as far forward as July.<\/p>\n
India usually awards Dubai in its monthly tenders, but the
\ncountry's appetite for the crude appears to be waning.<\/p>\n
In its April buying tender it took two Dubai cargoes, although
\nfour or five were offered.<\/p>\n
At that time traders said the IOC's contract to buy 3.6
\nmillion barrels of Iraqi crude would reduce its demand for Dubai.<\/p>\n
But in the May tender traders said Dubai was unable to compete
\nwith offers of Suez Blend.<\/p>\n
May Dubai, valued at US$1.25\/$1.40 below Brent, failed to
\nmatch offers of Gulf of Suez at dated Brent less $2.50 to $2.70.
\nIndia awarded five Gulf of Suez cargoes.<\/p>\n
Bangchak on the other hand, awarded for the first time Al
\nShaheem crude from Middle East, traders said. Bangchak rejected
\nfour offers of Oman crude, its normal crude diet, the best of
\nwhich was priced at MPM -3 cents, a refinery source said.<\/p>\n
That left the Oman cargoes hanging over the May market and
\ntraders doubted there was demand for the grade to meet the
\nsupply.<\/p>\n
They suspected sellers would hold out for the release of
\nOman's official selling price for March to see if that would help
\nperception of the crude's value.<\/p>\n
As Oman has traded at a discount for the May trading month,
\nsellers would be expecting a cut in the official selling price,
\nor MPM, and a narrowing of Oman's premium over Dubai, which
\ncurrently stands at $1.05 per barrel, traders said.<\/p>\n
A flurry of Minas deals late last week and early this week has
\nhelped support the Minas market, with the differential coming in
\nto ICP -10 cents from ICP -15 cents.<\/p>\n
However, while the Brent\/Dubai remains relatively narrow -- it
\nwas nearer $2.00 in early March -- Indonesian grades are likely
\nto be displaced by West African crude imports in China and South
\nKorea.<\/p>\n
The West Africa-to-Asia VLCC freight has risen to Worldscale
\n60 from 52 over recent weeks, but that still leaves ample room
\nfor West African imports, traders said.<\/p>\n
\"From what I can see there is demand moving into May
\nloadings,\" one West African seller said.<\/p>\n
Cabinda is now sold out for April loadings, one major said.
\nChina has taken three or four April loading VLCCs of Cabinda,
\ndisplacing some Minas.<\/p>\n
An expected surge in China's demand for crude imports in 1997
\nto possibly higher than 30 million tons means that much of its
\nrequirements could well be met from outside of Asia.<\/p>\n
\"We are going from a situation where demand in volume is such
\nthat people need to procure big volumes of crude oil, which local
\nmarket can not give,\" the major said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/asian-crude-oil-prices-likely-to-tumble-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}