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Asia-Pacific crude-glut could worsen; Petronas sells Tapis
[SINGAPORE] The Asia-Pacific crude market remained subdued with higher inflows of cargoes from the Atlantic basin adding to the bearish outlook.
Spot trade in Malaysian cargoes was slow, with traders saying sellers would ship more crude to their own refining systems instead of offering on the market.
State-owned Petronas sold a cargo of August-loading Tapis to Philippine refiner Petron, traders said. The cargo was likely to be processed at Petron's Port Dickson refinery in Malaysia, which would give some tax benefits over exports.
The price was linked to Tapis official selling price (OSP), but the details could not be confirmed.
Refinery demand remained solid, although weakening middle distillates cracks could put pressure to refining margins in the coming months.
The oversupply could worsen with traders saying the arbitrage window to bring Atlantic Basin cargoes to Asia was open.
Russia's Surgut offered five ESPO cargoes in a tender that closes on Thursday. The cargoes will load Aug 11-15, Aug 19-23, Aug 23-27, Aug 25-29 and Aug 27-31.
Brent-Dubai Exchange of Futures for Swaps (EFS, or Brent's premium to Dubai swaps, narrowed 2 cents to $1.28, the lowest in more than two months.