Asian crude prices steady, Minas weakens

Asian crude prices steady, Minas weakens

SINGAPORE (Reuter): Crude oil prices in Asia were mostly stable yesterday with the regional focus honed on the Minas Indonesia grade, which is being pressured lower.

Slack demand has driven the differential to a talked discount yesterday of 30 U.S. cents per barrel below the contract price. An absence of buying from China and moderate demand from Japanese utilities has allowed major buyers to wait in the wings of the market for lower prices, traders said.

A Japanese refiner was said to have bought two lots of 100,000 barrels of Minas on Friday from producers at a 23-cent discount. Some sources said the price was nearer minus 30.

A million Minas barrels remain on the shelf for August, traders said.

China, traditionally a Minas buyers, has been absent from the August market and instead is trading out of Oman and into Masila, sources said.

Traders said China late last week may have bought up to 1.5 million barrels of September Masila between OSP minus 5 cents and OSP minus 15 cents.

At the same time, China sold three cargoes of September Oman at premiums of plus 2 cents and plus 3 cents, traders said.

Brent/Dubai paper was steady versus London's Friday levels.

Brent/Dubai for October was talked at US$1.35/$1.42 per barrel, versus $1.35/$1.40 late on Friday. Other months were not discussed. Dubai for Sept/Oct was offered at 37 cents and Oct/Nov was quoted at 30/36 cents. Brent spreads were quiet.

Brokers said overall direction would depend on whether Brent manages to make a sustained break above $20.00 per barrel, or whether the price retreats.

They said the market appeared to be consolidating for the time being. September Brent was last traded in London at $20.00.

production

Meanwhile, the Middle East Economic Survey (MEES) reported yesterday that production of crude oil by Organization of Petroleum Exporting Countries (OPEC) remained stable in July at more than 25 million barrels per day (bpd).

July's production of 25.59 bpd was only slightly more than June's 25.563 bpd, the newsletter said.

The 11 members' production exceeded by 557,000 bpd the ceiling imposed by the cartel in June, despite Gabon's exit from OPEC with its quota of 287,000 bpd and Iraq's authorization to produce 800,000 additional bpd.

Iraq still has not benefited from the partial lifting of the embargo imposed on it by the United Nations six years ago.

Venezuela remains at the head of those members who have surpassed their OPEC-authorized level of production, with 711,000 bpd beyond its quota, followed by Nigeria, which has overproduced by 115,000 bpd, Qatar by 92,000 bpd, Algeria by 80,000 and Indonesia by 70,000 bpd.

Only Saudi Arabia, the world's largest oil producer has stuck to its quota of eight million bpd, in force since the 1990 Iraqi invasion of Kuwait. Previously its quota was 5.3 million bpd.

The average OPEC basket price was fixed at $19.29 a barrel, against $18.36 a barrel in June. The price is still below OPEC's goal of $21 per barrel, which it has been aiming at for nearly three years.