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Asia-pacific crude: Weak demand pressures market

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The Asia-Pacific crude market came under pressure on Monday as refiners showed little appetite for February barrels which meant several cargoes from that month were overhanging the market.

[SINGAPORE] The Asia-Pacific crude market came under pressure on Monday as refiners showed little appetite for February barrels which meant several cargoes from that month were overhanging the market.

PV Oil sold 300,000 barrels of Bunga Orkid loading in February at around US$2.50 a barrel above dated Brent, a trader said, slightly lower than last month when the medium sweet grade was traded at a premium of US$2.50-US$2.70 a barrel.

The buyer was not known and the deal could not be independently verified.

Petronas failed to award a tender to sell 600,000 barrels of Labuan loading Feb 21-26 and instead was in the process of selling it via private negotiations, traders said.

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Petronas had offered the grade at a premium of more than US$5 a barrel against dated Brent, but failed to attracts buyers due to weakening middle distillate cracks and because many traders were away for Christmas holidays, they said.

Last month, the premium for Labuan rose to US$5.50 a barrel against dated Brent, according to Reuters data.

Sellers of Malaysia's Kikeh grade had offered February-loading cargoes at a premium of more than US$5 a barrel against dated Brent, but no trades were heard yet.

Vietnam's crude oil exports in 2014 rose an estimated 8.9 per cent from a year earlier to 9.16 million tonnes, or 184,000 barrels per day (bpd), the General Statistics Office said in its monthly report.

The country's crude oil production in December was estimated at 1.43 million tonnes, or 338,000 barrels per day, up 7.4 per cent from a year earlier, the government said. The output this month brought Vietnam's production in 2014 to 15.53 million tonnes, up 1.8 per cent from last year.

Brent's premium to Dubai swaps, or Brent-Dubai Exchange of Futures for Swaps (EFS) DUB-EFS-1M , edged lower by 4 cents to US$1.80 a barrel.

Brent crude is currently around US$60 a barrel. It is down 48 per cent since hitting the year's high above US$115 per barrel in June, partly in response to a decision by OPEC in November not to cut supply to address a slump in prices.

China is raising the threshold for a windfall tax on crude oil production to US$65 a barrel starting Jan 1, the government announced on Sunday, versus US$55 previously, to help ease oil firms' tax burdens as global crude markets sank below US$60.

Japan's total oil product sales fell 7.8 per cent in November from a year earlier to 3.26 million barrels per day (15.55 million kilolitres), the lowest for the month since 1985, trade ministry data showed on Friday.

REUTERS

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