Crude/Condensates: Jun 28-Jul 2: ADNOC cuts Sep term supplies by 15%
Middle East Crude
Abu Dhabi National Oil Co (ADNOC) in the United Arab Emirates (UAE) informed its term buyers in Asia of supply cuts for September-loading. ADNOC reduced 15% for all Abu Dhabi grades against contractual volumes. ADNOC's term supplies for August-loading were slashed by 5% for all grades, so that the supply cuts for September-loading widened. "The August Murban contract for IFAD weakened in late June, generating concerns over loosening supply demand. Under the circumstances, ADNOC may have widened the suppl cuts," said a trader in Singapore. The wider supply cuts by ADNOC came despite expectations that the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC, or OPEC plus, would ease supply cuts at its meeting on Jul 1.
Indonesia's state-owned Pertamina purchased August-loading Nigerian Okwuibome from European Vitol and Amenam from French Total for its September arrival sweet crude buy tender closed on Jun 24. It later turned out that both of the awarded prices were at premiums of the $3.00s level to Dated Brent.
Asia Pacific Crude
Spot differentials or August-loading Australian Cossack weakened to discounts of 75-85cts to DTD Brent. Two cargoes for competing Kutubu were slated for August-loading and there was a spot cargo for Varanus, indicating that supplies for these light grades were ample. In addition, buyers with potential demand were limited, sending the market lower. British BP, once a major end-user for Australian light grades, closed its Kwinana refinery (146,000bbl per day) in Australia earlier this year, so their demand for Cossack disappeared, which weighed on the Cossack market. Japan's Mitsui & Co. sold August-loading Cossack to a trader in the spot market as reported. It later turned out that the price was at a discount of around 80cts to DTD Brent.