Asian crude market awaits news from RI

Asian crude market awaits news from RI

SINGAPORE (Reuters): Focus in the Asian crude market this week will be on July export availabilities from Indonesia and the Middle East which help determine the direction of the market, traders said yesterday.

Indonesia is due to release its July monthly allocations later yesterday, but compared to usual months, market speculations on volumes have been vague due to the reshuffling of the country's oil import/export methods.

On the spot market, refinery run cuts in South Korea and Singapore have kept the levels of Indonesian crudes relatively weak, with heavy sweet Minas talked around parity or a slight discount to the official Indonesian Crude Price (ICP).

But trading has been at a virtual standstill in the last fortnight in anticipation of the allocations.

"It's very quiet, no one wants to do anything until they know more about the July allocations," said a Japanese trader.

Indonesian state oil company Pertamina said last week it would issue a tender to cover its July requirements.

The news follows plans by Pertamina to review its relationships with affiliated companies Perta and Indoil.

But traders were still uncertain of Pertamina's exports plans and if the two affiliates would be given July crudes to market.

"Perta and Indoil may still get July allocations because it's too soon for any change. But we don't know how much total volumes will be allocated," one trader said.

Pertamina has two other affiliates, Pacific Petroleum Trading (PPT) and Korean Indonesian Petroleum Co (Kipco), which also handle marketing of Indonesian crudes to Japan and Korea on behalf of Pertamina.

Term buyers of Saudi Arabian crude were also waiting for indications from state-owned Saudi Aramco about July availabilities, after submitting their nominations last week.

The buyers said they had kept their nominated lifting volumes unchanged, as there had not been indications from Aramco on how much term volumes would be affected by the latest output cuts.

Previous output reductions had only affected incremental liftings and not actual term volumes, they said.

Saudi Aramco said on June 4 that together with Mexico and Venezuela, the three producers would cut output by 450,000 barrels-per-day (bpd) as part of the "Amsterdam Pact".

Qatar had also pledged to cut 20,000 bpd from July 1, while Kuwait said it would cut between 50,000 to 100,000 bpd.

But term lifters were still waiting for information on how much the cutbacks would impact their term liftings.