Seasonal demand boosts Asian crude oil prices

Seasonal demand boosts Asian crude oil prices

SINGAPORE (Reuters): Spot premiums of heavy Asian crudes
continued to climb, boosted by seasonal demand coupled with
expectations of lower export volumes from Indonesia, traders said
yesterday.

Two equity producers between them sold 300,000 barrels of
August Minas to a Japanese refiner at a premium of 60 cents per
barrel to the ICP, the highest premium for Minas seen this year,
traders said.

For July, Minas had traded only as high as ICP +20 cents.

Traders said a 150,000-barrel parcel of August Widuri was also
sold by an equity producer to another Japanese refiner, at ICP
+62 cents.

Heavy Duri was similarly strong, as an equity producer sold
200,000 barrels for August at 45 cents over its ICP.

Traders said that seasonal demand and predictions of a hot
summer had led to a surge in buying by North Asian buyers.

But speculation of a drop in Indonesia's August export
allocations was also fueling the bullish sentiment, traders said.

"It (August Indonesian exports) will definitely be lower,"
said a Japanese trader.

"They will need the Widuri and Cinta and maybe Minas for their
own use, because as you know, they had some difficulty with
imports regarding payments," he added.

Indonesian state oil company Pertamina emerged in July to buy
crudes direct from the spot market for the very first time, but
difficulties in obtaining international letters of credit caused
some of its spot purchase deals to fall through.

But apart from expectations of reduced exports, traders said
they had not been able to glean any information on actual
numbers, or how much lower exports would be in comparison to
July.

"It's expected that the allocations will be lower, but how
much lower, no one knows," said a trader with a major oil
company.

Indonesian state oil company Pertamina is due to announce its
export allocations for August later this week.

The Middle East crude market was quieter, with the remaining
partial cargo of August Murban still on offer, traders said.

There was also some August Oman left, with assessed levels
steady at MPM -2 cents.

But traders said that some notional interest was starting to
emerge for September barrels, at stronger prices compared to
August.

They said that initial bids for September Murban were seen at
parity to the ADNOC price, and expected to improve.

Qatar has told its Asian term buyers that term liftings for
August Qatar Marine will be cut by 9 percent, while Qatar Land
volumes will be reduced by 7 percent.

This is deeper than the cuts implemented in July, where Qatar
Marine was reduced by 3 percent and Qatar Land left untouched.