Asian crude mart stable on RI allocations

Asian crude mart stable on RI allocations

SINGAPORE (Reuters): The heavy Asian crude market was steady on Wednesday, as the final heavy sweet allocations from Indonesia was revealed to be much higher than earlier expected, traders said.

Indonesia allocated 30,000 barrels-per-day (bpd) of Minas, 11,000 bpd of Widuri and 4,000 bpd of Cinta.

This is in contrast to the 7,000 bpd of Minas and no Widuri or Cinta that the market had expected to be allocated.

"There's no shortage of Minas barrels now," said a Japanese trader.

Traders said that although the heavy sweet market was not weak, the higher than expected Minas export allocations would ease the tight market, keeping fundamentals balanced.

But spot trading was limited, most shoshas and affiliates have committed their barrels to term buyers, leaving only equity producers with small volumes of surplus barrels to sell.

Traders said that with the market balanced, January spot prices of heavy crudes would be driven by how much requirements China and Australia come up with.

But they added that Chinese demand so far has been lower than earlier predicted, and expected that Minas premiums would remain stable at 80 cents over the ICP or fall slightly.

"We had expected big Chinese demand before the Lunar New Year," said a Japanese trader. "But it is not so big right now, so that is a slightly bearish factor."

Some traders said that China has bought several cargoes of heavy Vietnamese Bach Ho crude, but was not actively looking for Indonesian heavy grades.

Vietnam's state Petechim awarded its February loading Bach Ho tender to a Chinese trader at 11 cents per barrel over the OSP.

There was no activity on the Middle East crude market as many traders were already away for Christmas.

Talk of a February Qatar Marine done at a discount of 30 cents to QGPC could not be confirmed, and was thought by some traders to be too low.