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Dec. 29 (Bloomberg) -- Mercuria Energy SA bought 500,000 barrels of Abu Dhabi’s Upper Zakum crude for February loading from SK Innovation Co., according to a survey of traders who monitor the market.
The Geneva-based energy trader’s purchased 19 Dubai partial contracts through the oil-pricing system operated by publisher Platts. Under Platts rules, the deals must be consolidated into one cargo when the same buyer and seller agree to trade 19 or more of the 25,000-barrel lots.
Mercuria paid $105.40 and $105.50 a barrel for its 18th and 19th partial cargoes today. Royal Dutch Shell Plc also bought a Dubai contract from SK Energy, at $105.20.
Asian refiners’ demand for Middle East crude has declined as processors have fulfilled their needs for February supplies. Oil sellers will begin offering March cargoes after the first week of January.
Two recent tenders are still to be awarded. Rosneft has offered to sell two 100,000 metric-ton cargoes of ESPO crude for Feb. 13-16 and Feb. 25-28. Bids closed today. Surgutneftegas and TNK-BP this week sold eight ESPO cargoes at premiums ranging from $5.70 to $6.50 to Dubai prices.
Vietnam’s PV Oil Co. has also offered 400,000 barrels of Bunga Kekwa oil for Feb 23-29 lifting. Bids were due yesterday.
The price of Dubai crude, the benchmark grade for Middle East oil, fell $1.23 today to $105.81 a barrel, according to data compiled by Bloomberg News.
The Singapore refining profit for processing a barrel of Dubai crude into fuels such as gasoline and diesel was $2.76, compared to an average of $4.72 for the last three months, Bloomberg data showed.
The Dubai swaps backwardation, a market situation when the cost of prompt shipments is greater than that for later supplies, narrowed today. Dubai for January compared with March fell 9 cents to $1.14 a barrel, according to data from PVM, a broker. The price difference was at $3.45 on Nov. 14. A decline in the level shows that demand for oil has weakened.
The February Brent-Dubai exchange for swaps, which measures the European benchmark contract against the Middle East grade, narrowed by 23 cents to $3.62 a barrel, according to PVM data. The exchange for swaps for March fell 6 cents to $3.45.
Oman futures for February delivery declined 92 cents to $106.58 a barrel on the Dubai Mercantile Exchange at 4:42 p.m. Singapore time with 1,078 contracts traded. The settlement price was $106.58 at 12:30 p.m. in Dubai.
--Editors: Christian Schmollinger, Alexander Kwiatkowski
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