Royal Dutch Shell Plc (RDSA) bought three Dubai partials from Phibro, a unit of Occidental Petroleum Corp. (OXY:US), as timespreads for the grade widened, indicating increasing demand.
Shell paid $108.20 a barrel for the 25,000 barrels lots for February loading, according to a survey of traders who monitor transactions on the Platts window. Mercuria Energy Trading SA sold one February partial to Shell and bought the same quantity for March from the company, according to the survey. The earlier shipment sold at a premium of $1.90 to the later cargo.
Dubai crude’s backwardation, when near-term shipments cost more than future deliveries, widened 16 cents. Spot prices were $1.97 a barrel higher than cargoes for two months later, the most since Dec. 17, according to data from PVM Oil Associates Ltd., a broker.
An increasing backwardation signals strengthening demand from refineries for prompt crude amid tightening supplies.
Benchmark Asia-Pacific refining margins, or the profit from processing a barrel of Dubai crude into fuels such as diesel and gasoline priced in the regional oil-trading hub of Singapore, averaged $3.44 during the last five days, according to data compiled by Bloomberg. The 30-day average was $2.68.
The February Brent-Dubai exchange for swaps, which measures the European oil’s premium to Mideast crude, rose 11 cents to $4.86 a barrel. The March EFS gained 12 cents to $4.31.
Abu Dhabi’s Murban crude dropped 2 cents to a discount of 40 cents a barrel to its official selling price, the lowest level since May 22., according to data compiled by Bloomberg. Lower Zakum declined 3 cents to a discount of 18 cents and Qatar Land fell 2 cents to a discount of 55 cents, both at the lowest level since Aug. 1. Qatar Marine was unchanged for a second day at a premium of 13 cents.
Oman futures for February delivery closed up $1.21 at $108.15 a barrel at 12:30 p.m. local time on the Dubai Mercantile Exchange.
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