Japanese demand spurs RI's Minas crude<\/p>\n
SINGAPORE (Reuters): Recent disruptions to gas output in
\nIndonesia have proved a boon for the country's Minas crude oil
\nexports, as hungry Japan power plants eye the grade as an
\nalternative fuel, traders said on Tuesday.<\/p>\n
Japan utilities, keen to secure fuel stocks ahead of the peak
\ndemand summer months, are considering taking extra barrels of
\nMinas for May, which has led to the crude's premium versus the
\nofficial selling price (OSP) to jump to about 50 cents a barrel.<\/p>\n
Minas now stands at the highest premiums over OSP for at least
\nfour months and was trading at a discount to the OSP at the start
\nof the year.<\/p>\n
\"Most utilities and refiners have to build burning fuel stocks
\nbefore the summer in June and July, but this year the Indonesia
\nLNG plant outage could be a main factor for them to start early,\"
\none Tokyo-based trader said.<\/p>\n
Japan has been scrambling since mid-March for alternative fuel
\nsources for power generation after LNG supplies from Exxon Mobil
\nwere curtailed when the company closed gas fields in Indonesia's
\nAceh province due to security concerns.<\/p>\n
Sentiment for the medium sweet crude is further made bullish
\nby the small size of the spot market, most term contract buyers
\ndo not resell their cargoes.<\/p>\n
Major sellers, Chevron and Texaco -- which jointly own Minas
\nfield operator Caltex Indonesia, were due to offer a total
\n500,000 barrels for May.<\/p>\n
The crude normally trades in small parcels of between 50,000
\nand 150,000 barrels.<\/p>\n
Traders said Indonesia's state oil company Pertamina is
\nunlikely to see any great benefit from higher Minas premiums
\nbecause it exports mostly on term contracts, which were fixed at
\nabout ICP +30 cents this year.<\/p>\n
Pertamina may also be hampered from offering extra Minas
\nbarrels for May because its Balongan refinery is due to restart
\nat the end of March after a scheduled maintenance closure.<\/p>\n
Minas and Duri crudes make up to 60 percent of Indonesia's
\ntotal crude production of just under 1.3 million barrels per day.<\/p>\n
Traders said unlike Minas, the Duri market was lacklustre.<\/p>\n
Korean utilities, which can use the heavier Duri crude for
\nburning, have not been seen raising import demand so far.<\/p>\n
Japan rarely buys Duri as the grade's specifications are
\nunsuitable.<\/p>\n
Oil price<\/p>\n
Meanwhile, oil prices held firm on Tuesday as the market
\ncontinued to focus on U.S. stocks of gasoline. Fresh data due
\nlater in the day was expected to show a renewed draw in U.S.
\ninventories.<\/p>\n
North Sea bellwether Brent crude climbed 20 cents in opening
\ndealings while U.S. benchmark light crude traded six cents off at
\n$27.42 a barrel.<\/p>\n
Crude has gained almost one dollar in the last two sessions
\namid rising concerns that lean gasoline stocks in the world's
\nbiggest energy consumer will lead to a repeat of last year's
\nspike in U.S. pump prices.<\/p>\n
A top U.S. oil executive warned on Tuesday of a potential
\ngasoline supply crunch in the months ahead.<\/p>\n
\"We are going to have problems with gasoline...because of
\ndifferent specifications\" due to environmental regulations,
\nArchie Dunham, head of Conoco Inc, told an industry conference in
\nDubai.<\/p>\n
\"There could be a fundamental shortage,\" said Dunham, who
\nleads the fourth largest U.S. oil company.<\/p>\n
Gasoline prices hit record levels in 2000 as refiners
\nscrambled to meet new environmental requirements for cleaner-
\nburning grades just as U.S. motorists hit the road for summer
\nvacations.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/japanese-demand-spurs-ris-minas-crude-1447893297",
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"sponsor": "Okusi Associates",
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