SINGAPORE: The Asia-Pacific crude market was supported on Monday after Brent's premium to Dubai shrank to the narrowest since March.
The Brent-Dubai Exchange of Futures for Swaps (EFS) for September fell 25 cents to $2.81 a barrel at Monday's close.
A narrower spread between the two benchmarks underpins differentials for Brent-linked grades produced in Asia-Pacific and the Atlantic Basin.
Still, demand for September-loading crude may come under pressure from an upcoming maintenance season that peaks in October. About 1 million barrels a day of processing capacity in Asia will be shut in October, according to Reuters calculations.
Several Asian refiners are already processing less crude as they grapple with margins that plunged to five-year lows after the region was flooded with supply of refined products and as slowing economic growth hits fuel demand.
These include Singapore Refining Company, South Korea's SK Energy and GS Caltex. Hyundai Oilbank and Taiwan's Formosa are also running less crude in July due to maintenance.
However, two consecutive quarters of lower refinery runs may point to a rebound in Asian demand for crude towards the end of the year, with appetite for jet fuel, also used for heating, typically peaking in winter.
"Fuel inventories and crude prices are starting to come off in third quarter and we're going into maintenance season again," said a trader with a North Asian refinery. "Q4 will be better than Q3."
REFINERY
China Petroleum and Chemical Corp, or Sinopec, said it plans to overhaul its subsidiary refinery for maintenance at Jiujiang in the southern province of Jiangxi between March and April 2017.
China granted independent refiner Shandong Hengyuan PetroChemical Co Ltd a final 3.5 million tonnes a year crude oil import quota, the state planner said.
MARKET NEWS
Militants launched a new round of attacks on oil pipelines in Nigeria's southern Niger Delta energy hub belonging to Italy's Eni and Aiteo, Nigerian security forces, Eni and a militant group said.
Singapore-listed CEFC International's oil trading team resigned over the weekend, three sources with direct knowledge of the matter said.
Indonesian state power firm PLN says it cannot comply with government rules on burning diesel with a bio content of at least 30 percent as it would damage generators, potentially curbing demand for biofuel ingredient palm oil in the world's top producer of that commodity.
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