Minas crude steady on Aussie demand
Minas crude steady on Aussie demand
SINGAPORE (Reuter): Spot premiums of Indonesian low-sulfur,
sweet crude oil Minas, were steady on tight supplies, exacerbated
by a refiner's import of 600,000 barrels to Australia, industry
sources said yesterday.
Sources added that over the past two weeks, a European refiner
bought at least 600,000 barrels of June lifting Minas crude for
its refinery in Australia. This compared to a typical monthly
import of 200,000 to 400,000 barrels by Australia.
"The refiner usually buys low-sulfur waxy residue (LSWR) for
its Australian refinery feedstock. But, prices of LSWR have risen
to levels that are too expensive. The alternative is to take
Minas," one trader with an Australian firm said.
Spot prices of LSWR have risen by about US$2 per barrel since
April to over $18 presently. Traders said the market was
underpinned by Indonesia's lower export availabilities of 3.4
million barrels in June, compared with 3.7 million in May.
Absolute prices of Minas have held relatively steady at
$18.40-$19.00 per barrel since April although premiums have risen
from parity to ICP to about 40-45 cents now.
Sellers premiums, targeted at 45 cents per barrel over
Indonesian Crude Price (ICP) were expected to be achieved as
traders said most supplies were now in the hands of an equity-
producer.
Traders added the inability of endusers to move West African
alternatives such as Cabinda into Asia due to a surge in Brent
prices added to tight supply of low-sulfur crude oil in Asia.
In contrast to strong Minas prices, spot premiums of
Indonesian low-sulfur heavy grade, Duri, have fallen from their
peak of $1.60 over ICP to be offered at $1.10-1.20 on Friday.
Traders attributed the slide to emergence of fresh sellers
lured into the spot market by the attractive premiums but only to
face sluggish demand. Demand from fuel oil blenders weakened as
prices of fuel oil fell.
Spot prices of fuel oil in Singapore fell to $96 per ton from
about $100 last Friday.
Traders estimated about 500,000 barrels of fresh June lifting
Duri supplies were available on Friday.
In general, crude oil prices in Asia were stable in lackluster
trade yesterday ahead of a long weekend in most of Europe and the
United States.
Continued position squaring was felt likely to dominate
activity in London and New York as most traders appeared
reluctant to hold positions into the following week amid recent
volatility and uncertain market direction.
On NYMEX after trading hours ACCESS system, July was trading
around US$21.18 per barrel against its New York close at $21.23.
Cash July Brent was at $19.85/19.95. On SIMEX, it was trading
around $18.90 against its IPE close at $18.89.
Brent/Dubai spread widened by 10 cents, with July at
$1.75/1.85 and August at $1.50/1.55.
July/August Dubai spreads widened by 10 cents to 40/50 cents,
underpinned by India's healthy purchase of four July cargoes. In
June, it took one to two cargoes only. India also bought three
VLCCs of Nigerian Qua Iboe in its tender. Against dated Brent,
premiums were at $1.00, $1.049 and $1.0295 per barrel cost and
freight basis.
July Oman premiums stayed firm, with remnant offers targeted
at 13-15 cents. Offers of Murban remained at 40 cents premium,
with parcel lots of 250,000 barrels left.
Malaysia's target offer of July Tapis was at APPI Tapis plus
50 cents. Keen interest was seen from refiners in Singapore.
Spot offers of Australian Jabiru and Challis continued to ride
on Tapis' bullishness. Sell premium of end June Jabiru was at 50
cents while Challis was at 80 cents.