VNEconomyNews.com - Sweet crude for direct burning at power plants received a boost on Wednesday after robust Japanese demand and reduced Sudanese supply pushed Vietnamese Su Tu Den to a fresh high.
Japan has snapped up most of the Su Tu Den supply to meet strong demand from power plants in winter as its average nuclear utilisation rate fell to a record low of 15 percent in December. Reactors remained shut on safety concerns after the disaster last year.
Supply of Nile Blend, another direct-burning grade used in Japan, has also tightened after Sudan stopped buyers from shipping South Sudan oil over a dispute on transit fee with the newly independent country.
South Sudan said Khartoum confiscated 2.15 million barrels of southern oil at Port Sudan as both countries argue over how to share oil revenues.
As a result, the market could see higher bids for Vietnamese Bach Ho after PV Oil offered spot supply for the first time in five months.
Vietnamese grades bought for refining purposes are under pressure from a strong Minas price marker.
* TENDERS
- Vietnam's PV Oil sold up to 600,000 barrels of Su Tu Den crude to load in March at record premiums on robust demand from Japan, traders said.
The producer sold the cargoes to Japanese trading companies at premiums between $7.50 and $8.50 a barrel to the Minas formula, they said.
- PV Oil offered 600,000-800,000 barrels of Bach Ho crude for loading in the first half of March in a tender that closed on Wednesday with bids valid until Jan. 20.
- PV Oil sold 250,000 barrels of Song Doc crude for March loading via tender at a lower premium than the previous tender as a strong Minas price reference weighed on spot differentials.
The Song Doc cargo to load on March 15-21 was sold to an oil major at a premium between $9 and $9.50 a barrel to the Minas formula, traders said.
- BP's joint venture in Russia, TNK-BP, sold two cargoes of Russian ESPO crude for loading in March at steady premiums compared with most of the cargoes sold in the previous month on firm demand for the distillates-rich grade, traders said.
In the latest tender, TNK-BP sold its cargoes to load on March 1-10 to Shell and to Unipec at premiums of about $6 a barrel to Dubai quotes, they said.
- Murphy Oil sold 600,000 barrels of Malaysian Kikeh crude for loading in March at a similar premium from the previous month.
The U.S. producer sold the cargo to an unknown buyer at a premium just above $9 a barrel to dated Brent, traders said.
* TRADES
- Strong naphtha cracks continued to support condensate values in March. ConocoPhillips has sold a Bayu Undan cargo at about $6 a barrel below dated Brent to an unknown buyer, about $1 narrower than the discount for February parcels.
- BHP sold a North West Shelf (NWS) condensate cargo to Shell at a discount of around $4.90 a barrel to dated Brent, similar to Chevron's deal.
* EFS
- Front-month Brent/Dubai Exchange of Futures for Swaps (EFS) for March DUB-EFS-1M fell 22 cents from Tuesday to $2.73 a barrel, lowest since $2.62 on Dec. 20, 2010.
* MARKET NEWS
- Iraq aims to boost oil exports by up to 400,000 barrels per day over the next two months as it opens the taps at a new Gulf outlet, a senior Iraqi oil industry source said on Tuesday, signalling the world's biggest capacity expansion this year.
- Japan's commercial crude inventories rose 1.8 percent to their highest level in about 3-1/2 months last week despite robust refining, indicating strong imports, industry data showed.
- South Sudan on Tuesday said Sudan had taken control of 2.15 million barrels of southern oil at Port Sudan, loading oil onto vessels belonging to Khartoum as both countries argue over how to share oil revenues.
- India is not seeking a waiver from the United States that would protect buyers of Iranian oil from a fresh round of sanctions, and New Delhi continues to import from Tehran, Indian Foreign Secretary Ranjan Mathai said.
* REFINERY MARGINS
- Simple gross refining margins for Dubai in Singapore were at $2.35 per barrel, up from an average of the last five days of $2.13, Reuters data show. Over the last year, the average margin has been about minus 82 cents per barrel.
* CRACK SPREADS
- Fuel oil's February crack narrowed $1.00 to a discount of 16 cents a barrel to Dubai crude.
- Gasoil's February crack fell 97 cents to a premium of $18.43 a barrel to Dubai crude.
- The naphtha CFR Japan front-month crack narrowed 60 cents to a discount of $7.24 a barrel to Brent.
* OUTRIGHT PRICES
- March ICE Brent was at $111.49 a barrel at 0830 GMT, down 71 cents from Tuesday. (Reuters)
