Crude/Condensate: Jul 25-29: Abu Dhabi crude overhang witnessed
In the OTC market for Abu Dhabi grades, a sense of an overhang was growing recently. Unplaced cargoes were seen in the hands of French Total Energies. Some end-users in South Korea and Thailand, main buyers for Murban, prioritized procurements of attractively-priced US WTI Midlands, which resulted in fading Murban demand and surplus avails. As for US grades, more oil would be released from the Strategic Petroleum Reserves (SPR), which may lead to further loosening of demand/supply fundamentals.
Prices for WTI for September delivery to Northeast Asia weakened. With gasoil margins in Asia softening and gasoline demand in the US declining, supply/demand slackened. Thailand's PTT was said to have bought 1.00-2.00 mil bbls of US WTI Midland for October delivery in the spot market early this week. The price was said to be at a premium of about $6 to Dated Brent quotes on a CFR basis. This was equivalent to a premium of $12.10-12.20 to Dubai quotes. Prices for September delivery were seen to be at the same level as October delivery. Before the above deal, Taiwan's CPC Corporation had purchased a total of 4.00 mil bbls of WTI Midland for October delivery last week.
Asia Pacific Crude
In trade for NWSC from Australia, European trader Glencore sold NWSC loading August and Australia's BHP Billiton sold a cargo loading Sep 22-26 early this week, as was previously reported. After that, it was found that the buyer of both cargoes was Rongsheng Petrochemical. For trade for other regional condensates, Malaysia's state-run Petronas apparently awarded a sell tender closed early this week for second-half September loading Muda and first-half September loading Cakerawala. Details for the buyers were not heard, but both cargoes were said to have been awarded at a discount of $8-9 to Dated Brent.