ESPO Oil Trades Little Changed; Dubai Spreads Widen: Asia Crude

Russia’s East Siberia-Pacific Ocean crude loading in the second half of November sold at levels little changed from deals done for the first half of the month.

OAO Surgutneftegas sold three ESPO shipments loading at the Russian port of Kozmino during the last two weeks of November and early December at premiums of $4.20 to $4.90 a barrel over Dubai oil, said three people who participate in the market.

Japan’s JX Nippon Oil & Energy Corp. purchased one of the cargoes for Nov. 18 to Nov. 22 at about $4.20 to $4.30 above the marker grade, said one of the people, who asked not to be identified because they aren’t authorized to speak to the media.

The Russian oil producer sold ESPO for the first half of November at premiums between $4 and $5, four people said yesterday.

ESPO shipments from Kozmino in November will rise to 16 cargoes of 100,000 metric tons each, up from 13 this month, a loading program obtained by Bloomberg News showed.

Dubai crude’s backwardation, when near-term shipments are more expensive than future deliveries, rose 3 cents. Spot prices were $1.55 a barrel more than levels for cargoes two months later, up for a second day and the highest in seven days, according to data from PVM Oil Associates Ltd, a broker.

A widening backwardation signals strengthening demand from refiners amid tightening supplies.

PT Pertamina, Indonesia’s state-owned oil company, reissued a tender seeking to buy low-sulfur crude for delivery in December, said a company official, asking not to be identified because he isn’t authorized to speak to the media. The tender closes tomorrow.

Malaysia lowered the official selling price of its Tapis crude by $2.46 to $115.91 for September, according to an e-mailed notice from Petronas Trading Corp., or Petco, a wholly-owned subsidiary of the state oil company.

Iraq Exports

Iraq is boosting oil output to help meet global demand for crude and is “happy” with current prices for the commodity, said a senior adviser to Prime Minister Nouri al-Maliki.

The country’s crude exports will reach 2.9 million barrels a day next year as output rises to 3.6 million barrels daily, Thamir Ghadhban said in an interview in Dubai today. The country targets production of 4 million barrels in 2014, he said.

Refining margins in Singapore, or the profit from processing a barrel of Dubai crude into fuels such as diesel and gasoline priced in the regional trading hub, averaged $5.25 during the last five days, according to data compiled by Bloomberg. The 30 day average is $4.85 a barrel.

The November Brent-Dubai exchange for swaps, which measures the European oil’s premium to the Mideast marker, was unchanged at $3.50 a barrel, according to PVM data. The December EFS was up 2 cents to $3.32.

Oman oil for December delivery rose 37 cents to settle at $109.66 a barrel at 12:30 p.m. on the Dubai Mercantile Exchange.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE