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Weekly SummaryMarkets/International

Crude/Condensate: Oct 12-16: China's Rongsheng buys large volumes via tender

Middle East

 China's Rongsheng Petrochemical purchased a large chunk of Middle Eastern crude grades like Abu Dhabi Upper Zakum in its November to December arrival crude tender closed on Tuesday as reported. It later turned out that the Chinese oil firm bought at least 3.50 mil bbl of Upper Zakum, 1.50 mil bbl of Al Shaeen,2.00 mil bbl of Iraqi Basrah Light and 2.00mil bbl of Oman. Almost all cargoes purchased by Rongsheng were for December arrival. Regarding the sellers, French Total sold Al Shaheen while US ExxonMobil supplied Al Shaheen. US Koch sold Upper Zakum and Al Shaheen and PetroChina sold Basrah Light. The seller for Oman was US Occidental Petroleum. The prices for Al Shaheen and Upper Zakum through the tender was heard at premiums of the 50cts level to Dubai quotes on a CFR basis.

 

Africa/Europe/Russia/America

 Spot differentials for December-loading Sakhalin Sokol fell. While crack margins for middle distillates recovered slightly in Asia, the outlook demand remained uncertain, so that buying interest was sluggish. "While crack margins have recovered slightly, if demand does not keep up, inventories of oil products would be accumulated again. Thus, refiners in Japan and South Korea are still cautious of raising operating rates," an end-user in Northeast Asia pointed out. In addition, Saudi Arabia did not reduce the term supplies for November-loading, which would limit spot demand for light grades, a market source said. Japan's ITOCHU Corp, an equity holder in Sakhalin Oil and Gas Development Co Ltd (SODECO) sold one spot cargo in the market on Thursday. The buyer was a Chinese end-user and the price was said to be at a discount of around 80cts to Dubai quotes.

 

Asia Pacific

 Spot differentials for Chim Sao for November-loading rose and flipped into positive territory. Economic activities were resumed gradually while margins for low sulfur fuel oil were improving. Those factors buoyed the market for Chim Sao. Vietnam's state-owned PV Oil sold 300,000bbl of Chim Sao for December 20-24 loading in its sell tender closed on Oct 9. The cargo was heard awarded to a major and the price was said to be at a premium of around 80cts to Dated Brent. In the first round of the Chim Sao tender, the highest bid was still at a small discount to Dated Brent. PV Oil earlier sold November-loading Chim Sao via tender at a discount of $1.00 to a premium of 30cts to Dated Brent as reported.

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