Dubai Crude Rises Ahead of Saudi Official Selling Prices

The price of Dubai (PGCRDUBA) crude, the benchmark grade for Middle East oil, rose $1.74 today to $106.58 a barrel, according to data compiled by Bloomberg News.

Saudi Arabian Oil. Co is scheduled to release price formulas on Jan. 5 for barrels bought in February. The state- owned oil company known as Saudi Aramco is expected to lower price differentials for customers in Asia, according to a poll of 11 crude buyers in China, India, Japan, Singapore, South Korea, and Taiwan.

Bharat Petroleum Corp. (BPCL), India’s second-largest state-run oil refiner, issued a tender seeking to buy low-sulfur crude for loading in February and March, according to a tender document obtained by Bloomberg News.

Rosneft Oil Co. sold two 100,000 metric-ton cargoes of East Siberian Pacific Ocean pipeline crude, or ESPO, late last week at premiums near $7 a barrel to Dubai, said three traders who participate in the market. They declined to be identified because the information is confidential. China International United Petroleum & Chemical Corp., known as Unipec (QRAHVZ), bought the cargoes for Feb. 13-16 and Feb. 25-28 loading.

Dubai Backwardation

The Dubai swaps backwardation (PVMMDU1M), a market situation where the cost of prompt shipments is greater than that for later supplies, narrowed today. Dubai for February compared with April fell 1 cent to $1.12 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 (PVMMDBSP), which measures the European benchmark contract against the Middle East grade, widened 3 cents to $3.68 a barrel, according to PVM data. The exchange for swaps for March increased 1 cent to $3.50.

Oman futures for March delivery rose 51 cents to $106.33 a barrel on the Dubai Mercantile Exchange at 4:44 p.m. Singapore time with 959 contracts traded. The settlement price was $106.33 at 12:30 p.m. in Dubai.

No Partials Traded

No Dubai partial cargoes were traded Tuesday, according to a survey of traders who monitor the Platts pricing window. Hess Corp. (HES)’s Hetco, China National United Oil Co., known as Chinaoil, and Royal Dutch Shell Plc unsuccessfully bid to buy at $105 to $105.40 a barrel, while offers to sell stood at $105.80 to $106.

Mercuria Energy SA on Friday bought 500,000 barrels of Abu Dhabi’s Upper Zakum crude for February loading from SK Innovation Co. (096770) after the Geneva-based energy trader purchased its 18th and 19th Dubai partial contracts. 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 for the same month.

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

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.