SINGAPORE: Premiums for December-loading Vietnamese crude held firm on demand from oil majors.
Vietnamese state marketer PV Oil awarded its sell tender for a 470,000-barrel December-loading Dai Hung crude cargo to Shell at around $2.40 per barrel to dated Brent, traders said.
PV Oil last sold a July-loading cargo of the same grade at a low-$1.00 per barrel above dated Brent to Itochu in May when overall refining margins were weaker than current levels.
Shell's purchase of the December-loading Dai Hung cargo and its previous deal for a November-loading Cossack cargo from Woodside could indicate that operations at its Pulau Bukom crude distillation unit in Singapore may be back to normal following an "operational upset" at the plant in end-September, traders said.
Malaysian state-owned Petronas, which marketed December-loading Vietnamese Ruby cargoes on behalf of other stakeholders, also awarded a tender to Chevron at premiums in the low-$2.00 per barrel to dated Brent, stable from November values. It was the first time in 15 months when Chevron bought the Vietnamese grade.
Petronas is also offering 600,000 barrels of Malaysian Kikeh crude in a tender that closes on Oct. 19. The cargo is due for Dec. 24-28 loading. November-loading Kikeh cargoes traded at premiums slightly above $4 per barrel to dated Brent.
Indonesian state-controlled Pertamina will also have 600,000 barrels of Kikeh for Dec. 7-15 loading, but the cargo is unlikely to be offered in the spot market as the oil firm tends to keep its allocations for its refining system, traders said. This could mean that spot availabilities of December-loading Kikeh will tighten from November when two 600,000-barrel cargoes were available for spot sale.
PV Oil was likely to have awarded its January-June 2017 term tender for Su Tu Den crude to Unipec at a low-$2.00 above dated Brent, although this could not be directly confirmed. In comparison, July-December 2016 term Su Tu Den supplies were sold at around $1.60 above dated Brent.
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