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.