Relative strength in premiums for the sour Middle Eastern crude market seen in recent days showed continued upward momentum Wednesday, as Asian refiners look to cover winter requirements and Chinese buyers look to re-stock, trading sources said.
In the Dubai market, the premium of cash Dubai to the Dubai swap rose 48 cents/barrel day on the day to a $3.43/b premium.
In addition, the premium of cash Oman to cash Dubai rose 60 cents/b to a 90 cents/b premium, the highest spread between the two grades since February 24, 2012, when it was assessed at $1.16/b.
The Brent/Dubai spread saw a narrowing, falling from $2.70/b on Tuesday to $2.19/b on Wednesday.
Oman crude futures on the Dubai Mercantile Exchange for the November contract settlement value using a weighted average of trades during the last five minutes of trading up to 4:30 pm Singapore time was set at $110.19/b, a rise of 93 cents/b on the day.
In contrast, November ICE Brent futures at 4:30 pm Singapore time were assessed at $110.84/b, a fall of 88 cents/b on the day.
In the spot market, November-loading Upper Zakum cargoes were heard trading up to a premium of 90 cents/b over the grade's OSP. This is despite an increase of 71.4 cents/b in the August OSP differential to Dubai for the grade, which placed the OSP differential at a $1.592/b premium to the average of August front-month cash Dubai assessments, according to Platts data.
In addition, Qatar's medium heavy sour grade, Qatar Marine, was also heard trading close to a $1/b premium to its OSP, a trader said.
In contrast, earlier in the week the grade was heard to be trading at a premium of around 50 cents/b to the grade's OSP.
During August, the grade mostly traded at premiums of 20-40 cents/b to its OSP, sources said.
"There are new refineries coming on-stream [in China], there are low inventories, the Chinese bought little in the second quarter," a trader of Middle Eastern sour crudes said.
He added that robust demand from Japan for crude, particularly for power generation, was another factor driving the market.
Turning to Murban, Abu Dhabi's main light sour crude grade, this was also heard to be trading at higher premiums, now discussed around a $1.20/b premium to its OSP, compared with a premium of around $1/b traders saw earlier this week.
The OSP for Murban rose to a premium of $4.592/b to the monthly average of Dubai assessments in August, up $1.264/b month on month, according to Platts data.
There were also unconfirmed reports of maintenance scheduled at Murban during November, which could affect around 100,000 b/d of production.
Typically Murban exports total around 1.5 million-1.6 million b/d.
