Crude market watching for RI allocations
Crude market watching for RI allocations
SINGAPORE (Reuters): Asia's crude market remains dogged by
weak demand, although quiet trading yesterday kept levels
relatively steady.
Potential sellers of July Indonesian crudes were sidelined,
wary of trading before clearer information on exports emerged.
Traders had mixed opinions about the export allocations from
Indonesia for July, with some expecting a large volume due to
reduced operating rates at the 125,000 barrels-per-day (bpd)
Balongan refinery.
But some were less optimistic, expecting that Indonesia would
keep more local crudes for its own use, either to run in local
refineries, reducing import needs, or to use for potential
exchanges in the future.
"Our guess is that July exports may be small. I'm sure they
would rather use the crude for themselves instead of giving it
out to traders," one trader said.
The monthly allocations are scheduled to be announced early
next week.
Traders said that weak Asian demand was limiting the movement
of West African cargoes to usual Asian buyers in Taiwan and South
Korea.
They said that Taiwan was planning to take its regular three
very large crude carriers (VLCC) of July loading West African
crudes comprising of Forcados, Palanca, Djeno and Nkossa, but
would not buy any on the spot market. Taiwan often supplements
its term barrels with monthly spot cargoes.
"Other than term cargoes, there will be very little July spot
cargoes of West African cargoes coming to Asia," a Japanese
trader said.
In the Middle East crude market, the last July cargoes were
finding homes, at stable levels.
A July Oman cargo traded between European majors at MPM +2
cents.
A few cargoes of Oman and Abu Dhabi crudes were still
available for July, but may be rolled over into August, traders
said.
Yemen set its July Masila crude term price at dated Brent
minus $1.75 per barrel, compared to the June price of dated Brent
minus $1.27.
Third quarter term Marib Light was set at parity to dated
Brent, unchanged from the second quarter.