Middle East Crude-Benchmarks fall; Upper Zakum trades at discount

SINGAPORE: Spot premiums for Middle East crude benchmarks fell on Monday while Upper Zakum also flipped into discounts as bullish sentiment for medium-sour grades eased towards the end of the month.

MIDEAST CRUDE: Abu Dhabi's flagship Murban crude has sold at a discount in Asia to its official selling price (OSP) for four straight months - the longest stretch in nearly two years - as buyers opt for cheaper US and European supplies, according to trade sources and Refinitiv data.

Total sold one April-loading cargo of Upper Zakum to Vitol at 15 cents a barrel below its official selling price (OSP) after offering the cargo on Platts window on Friday, traders said. Vitol may have resold the cargo at parity to its OSP, one of them said.

Spot differentials for the medium-sour grade have dropped from highs of 10-20 cents a barrel premiums seen earlier this month.

Taiwanese refiner CPC has bought four cargoes of April-loading Upper Zakum crude at discounts to its OSP via a tender, trade sources said.

The cargoes, 500,000 barrels each, were sold at discounts narrower than 10 cents a barrel to its OSP, they said.

Exxon Mobil, Unipec, Sinochem and Oman Trading International may have sold the cargoes, one of them said, but this could not be independently verified.

South Korea's KOGAS has sold 1 million barrels of Basra light crude for March loading at a premium of just under $1 a barrel to its official selling price (OSP), trade sources said.

The producer likely sold the cargo to a European trader, they said.

The seller may send the cargo to Europe because of its cargo size and its high premium, the sources said.

ASIA-PACIFIC CRUDE: Santos has sold its April-loading Pyrenees cargo at the highest premium ever seen for the heavy sweet grade due to strong fuel oil margins, trade sources said.

A drop in Brent's premium to Dubai also lifted spot premiums for Brent-linked grades, they said.

The producer sold the 550,000-barrel cargo loading on April 18-22 at a premium between $5.50 and $6 a barrel to a Japanese trading company, they said.

The premium is about $2 a barrel higher than the previous month.

Spot premiums for Malaysian and Vietnamese grades were also elevated.

PV Oil sold 400,000 barrels of Dai Hung loading on March 31-April 3 to Japan's Taiyo Oil at a premium of about $4.10 a barrel to dated Brent.

Petronas has sold 300,000 barrels of Bunga Orkid loading on April 16-22 to a trader at $3.50-$4 a barrel above dated Brent.

Petroleum Brunei has sold its Kimanis cargo loading on April 1-5 at a discount of about 5 cents a barrel to its OSP to an oil major, traders said, down from a premium in the previous month.

Separately, Taiwan's CPC has also bought 4 million barrels of US West Texas Intermediate (WTI) crude and 1 million barrels of West African crude in its sweet crude tender for May arrival.

WINDOW: Reliance sold an April Dubai partial to Shell at $66.86 a barrel. That puts cash Dubai's premium to swaps at 48 cents, 4 cents lower than Friday.