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Middle East Oil Rises as Processing Profits Boost Refiner Demand

May 12 (Bloomberg) -- Middle East crude oils for sale to Asia rose against their benchmarks as higher-than-average processing profits drove demand from refiners.

Murban for July loading, produced in Abu Dhabi, climbed 18 cents to a premium of 63 cents a barrel above its official selling price, according to data compiled by Bloomberg. Lower Zakum, also produced in the emirate, advanced to the same level. Qatar Marine climbed 10 cents to a premium of 23 cents a barrel.

Middle East crudes have been supported by a surge in refining profits for middle distillates including gasoil and kerosene. Gasoil’s premium to Dubai crude was at $18.20 a barrel, about 58 percent higher than a year earlier, according to data from PVM Oil Associates Ltd., a London-based brokerage. Murban, Lower Zakum and Qatar Marine is prized by refiners for their higher yield of middle distillates compared with heavier Middle East crude such as Saudi Arabia’s Arab Medium.

Oman oil for immediate loading dropped $5.76, or 5.2 percent, to $106.08 a barrel, according to Bloomberg data. Dubai for loading in July fell 5.2 percent to $105.51 and Murban crude decreased 4.8 percent to $110.83 a barrel.

The Brent-Dubai exchange for swaps for June narrowed 9 cents to $6.54 a barrel, PVM data showed. The exchange for swaps for July fell 5 cents to $6.38 a barrel.

Oman futures for July delivery dropped $1.71 today to $105.97 a barrel on the Dubai Mercantile Exchange at 5:54 p.m. Singapore time, with 1,061 contracts traded. The settlement price was at $106.26 at 12:30 p.m. in Dubai.

To contact the reporter on this story: Christian Schmollinger in Singapore at christian.s@bloomberg.net

To contact the editor responsible for this story: Jane, Ching Shen Lee at jalee@bloomberg.net

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