Asia-Pacific crude-narrowing brent, Dubai gap supports

[SINGAPORE] The Asia-Pacific crude market was supported by Brent's narrowing premium to Dubai, although lower refinery demand and ample supply continued to weigh.

Brent's premium to Dubai swaps, or Brent-Dubai Exchange of Futures for Swaps (EFS) DUB-EFS-1M , narrowed 30 cents to US$0.66 a barrel. That was the lowest level since the second week of July, when the spread reached its lowest in more than five years.

The gap has narrowed more than US$1 since reaching a one-month high on July 17.

A narrower Brent-Dubai spread makes regional oil priced on the global benchmark more attractive to Asian refiners relative to Middle East crude, while also allowing more crude from the Atlantic Basin to head east.

Japan's Idemitsu Kosan bought a cargo of Bach Ho crude in a tender by Vietnam's PV Oil, traders said, although the pricing details were unclear. PV Oil had offered 250,000 barrels for Sept 1-7 loading and 300,000-350,000 barrels for Sept 8-14 loading.

Indian refiner BPCL bought a VLCC of Agbami and Qua Iboe for September-loading from BP, traders said.

Shell may have bought 600,000 barrels of Malaysian Kikeh for September-loading from Murphy Oil, traders said. The details of the deal could not be confirmed.

Indonesia's Pertamina offered 150,000-200,000 barrels of Geregai condensate loading Sept 15-30 in a tender that closes on Monday with bids valid until the following day.

Rosneft and Surgut will close a joint tender on Thursday to sell a cargo of ESPO crude for loading Sept 29-Oct 1.

State-owned and private companies will start up about 26 million barrels of new oil tanks in southern China in coming months, amid strong demand for storage from traders who expect prices to recover enough to pay for the cost of holding crude.

Royal Dutch Shell is to axe 6,500 jobs this year and step up spending cuts to deal with an extended period of lower oil prices which contributed to a 37 per cent drop in the oil and gas group's second-quarter profits.

Singapore's onshore inventory of oil products held by up to 13 major oil and oil storage companies as of July 29, according to data from International Enterprise (IE) Singapore released on Thursday.

REUTERS