Asia's crude market marginally firmer
Asia's crude market marginally firmer
SINGAPORE (Reuter): Asia's heavy crude market was marginally firmer on expectations of lower crude allocations from Indonesia for September, traders said yesterday.
The monthly allocations, due out either Friday or Monday, are expected to be smaller due to higher domestic demand, and the return of the 200,000 barrel-per-day Balikpapan refinery from a one month maintenance shutdown, they said.
In addition, traders expected Chinese demand to increase in September.
"The Chinese bought very little in August. They cannot go on like that for long, they will have to come out to buy," said a trader with a major oil company.
Trading on the Asian crude market was lackluster as traders waited for the confirmation of the Indonesian allocations.
But ahead of the allocation, a Japanese term lifter was aggressively trying to dispose of barrels, and was rumored to have sold a cargo of September Minas trade at ICP +20 cents per barrel, traders said.
Traders dismissed the rumor as other sellers of September Minas were showing much higher levels of ICP +50/60 cents, and were not anxious to sell since it was still early for September trading.
Buyers, on the other hand, were bidding at ICP +20, in line with the last trades done in August, when the market was more amply supplied.
The limited spot availabilities of light Australian crudes were also expected to lend support to the heavier grades.
"Refiners need to buy. And if they can't find light crudes, then they will have to look at the heavier grades as alternatives," said a producer.
On the Middle East crudes, the market was steady despite some September Abu Dhabi and Masila crudes still available.
"The market is not really weak, as most September supplies were committed quite early, apart from these last few cargoes," said a trader with a major oil company.
"October will probably start trading at levels similar to September, since there is nothing to pull prices up or down" he added.
October trading for the Middle East crudes were expected to start next week, but no price indications were heard yet from either buyers or sellers.