Chim Sao at Three Month High; Refining Margins Drop: Asia Crude

Vietnam’s Chim Sao oil sold at the highest premium since June, even as margins from turning crude into fuel products dropped to the lowest level in two months.

PV Oil Corp., Vietnam’s state-run oil-marketing company, sold four cargoes of Chim Sao crude loading in November at premiums of $4.80 to $5.20 a barrel to dated Brent, said three people who participate in the market.

The buyers included Royal Dutch Shell Plc (RDSA) and Itochu Corp. (8001), the people said, asking not to be identified because the information is confidential.

PV Oil sold August cargoes for as much as $7 a barrel more than the marker grades, two people said on June. 18.

Profits from processing a barrel of benchmark Dubai crude into fuels such as diesel and gasoline priced in the regional trading hub of Singapore averaged $3.96 during the last five days, the lowest since July 10, according to data compiled by Bloomberg. The 30-day average is $5.41.

Angola, Africa’s second-largest oil producer, will reduce its crude exports in November to 52 cargoes, five less than next month, according to a preliminary loading program obtained by Bloomberg.

The nation plans to ship 50 million barrels, or 1.67 million barrels a day, the plan showed. This compares with 1.77 million in October.

Dubai Timespreads

Dubai crude’s backwardation, when near-term shipments are more expensive than later cargoes, decreased 5 cents. Spot prices were $1.62 a barrel more than levels for cargoes two months later, according to data from PVM Oil Associates Ltd., a London-based broker.

The price difference is 71 percent wider so far in September. An increasing backwardation signals strengthening demand from refineries for prompt crude amid tightening supplies.

The November Brent-Dubai exchange for swaps, which measures the European oil’s premium to the Mideast marker, fell 15 cents to $3.55 a barrel, according to PVM data. The December EFS lost 6 cents to $3.63.

Oman oil for November fell 60 cents to settle at $114.76 a barrel at 12:30 p.m. on the Dubai Mercantile Exchange.

No Dubai partial cargoes were traded today, according to a survey of people 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

Bloomberg reserves the right to edit or 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.