Bloomberg News

Mideast Oil Premiums Near Seven-Week Low: Asia Crude

April 09, 2012

(Corrects time reference for premium level in first paragraph in a story published April 9.)

Premiums for crudes from Abu Dhabi fell to the lowest level in almost seven weeks. Saudi Arabia will make all its contracted shipments to Asia next month, according to buyers at four refineries in the region.

Abu Dhabi’s Murban (PGCPMURB) fell 2 cents to assessment 1 cent above its own official selling price, according to data compiled by Bloomberg. The emirate’s Umm Shaif (PGCPUMSH) crude was down 2 cents to a discount of 15 cent to its OSP. Both are at the lowest prices since Feb. 22, the data show.

Saudi Arabian Oil Co., the region’s largest supplier, will provide full contracted volumes to customers in Asia during May, according to four buyers at refineries in South Korea, Japan and Singapore who were notified by the company. They declined to be identified because the information is confidential.

The May Brent-Dubai (PVMMDBSP) exchange for swaps, which measures the European marker grade’s premium against the Middle East oil, rose 35 cents to $3.85 a barrel, according to data from PVM Oil Associates Ltd., a London-based broker. The June EFS also dropped 15 cents, to $3.97.

Dubai crude’s backwardation, when the price for delivery now is greater than that for later, fell 8 cents. Swaps for May were $1.72 a barrel more than July, according to PVM data.

Oman for June delivery was down $1.19 to $119.41 a barrel at 4:57 p.m. Singapore time on the Dubai Mercantile Exchange, with 1,561 contracts traded. The contract closed at $119.66 at 12:30 p.m. Dubai time.

JX Nippon Oil & Energy Corp. (5001) suspended talks with Iran over the renewal of a 10,000 barrel-a-day crude supply contract that was scheduled to start in April, according to a company official who declined to be identified because of internal policy.

Largest Buyer

Showa Shell Sekiyu K.K. (5002), Japan’s largest buyer of crude from Iran, is finishing talks on reducing its oil purchasing contract with the country for the fiscal year started April 1, Satoshi Yoshida, company spokesman, said April 6 in Tokyo.

Showa Shell plans to reduce the contract volume of about 100,000 barrels-a-day in accordance with an agreement between the U.S. and Japan. The U.S. and its allies have accused Iran of seeking to develop nuclear weapons and have imposed sanctions on the country, including limits on oil purchases.

Taiwan, which imports more than 99 percent of its oil needs, increased purchases of crude by 7.8 percent to 27.4 million barrels in March, the finance ministry said in Taipei today.

No Dubai partial cargoes were sold for the fifth day, according to a survey of traders who monitor the Platts pricing window.

To contact the reporter on this story: Ramsey Al-Rikabi in Singapore at ralrikabi@bloomberg.net

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


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