Bloomberg News

Middle East Oil Rises as Refiners Seek Distillate-Rich Grades

October 14, 2011

Oct. 14 (Bloomberg) -- Premiums for Middle East oil sold to Asia rose for a third day as refiners increased their purchases of distillate-rich grades.

Qatar Marine for loading in December climbed 9 cents to a premium of 37 cents over its official selling price, according to data compiled by Bloomberg. Murban, produced by Abu Dhabi National Oil Co., rose 1 cent to a premium of 17 cents.

Refiners in Northeast Asia are seeking to maximize their output of gasoil and kerosene before the winter heating season. Qatar Marine yields about 14 percent of kerosene after basic processing, more than the 9.6 percent from Arab Light, a typical Middle East grade. Murban produces about 18 percent.

Dubai swaps for November widened to a premium of $1.74 a barrel today compared with January, according to data from London-based brokers PVM Oil Associates Ltd. That’s up from $1.39 a week ago. This market situation known as backwardation suggests demand is greater for immediate shipments.

Oman crude for immediate loading increased $2.08, or 2 percent, to $106.24 a barrel, Bloomberg data showed. Dubai oil for loading in December rose 2 percent to $103.68. Murban for spot delivery climbed 1.9 percent to $110.52.

Oman futures for December delivery rose $1.80 to $107.75 a barrel on the Dubai Mercantile Exchange at 5:53 p.m. Singapore time with 1,079 contracts traded. The settlement price was $106.85 at 12:30 p.m. in Dubai.

The December Brent-Dubai exchange for swaps, which measures the European marker contract against the Persian Gulf grade, narrowed 57 cents to $6.08 a barrel, said PVM. The exchange for swaps for January fell 26 cents to $5.12.

--Editor: Mike Anderson

To contact the reporter on this story: Christian Schmollinger in Singapore at christian.s@bloomberg.net

To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net


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