Spot premiums for August-loading light-sour Murban crude recovered from last week's sharp decline as bargain hunters emerged for cheap barrels, traders said on Tuesday.
August-loading Murban was assessed at the ADNOC formula plus 35-40 cents a barrel compared with a premium of 30-35 cents on Monday.
Traders said that buyers were encouraged by the last deal on Friday at ADNOC plus 32 cents a barrel, which was almost 20 cents off a trade above 50 cents earlier last week.
"They (buyers) are now in the market as they see the trend is changing," said a trader at Japanese refiner.
A US major was heard buying August Murban at about ADNOC plus 38 cents a barrel. Traders said the US major was likely to bring the cargo to its affiliate refineries in Asia. Market sources said Kenya's Mombasa refinery bought 1.2 million barrels of August-loading Murban crude.
Traders said Kenya paid a premium of $1.90 a barrel to spot Dubai quotes on a cost and freight basis, which is equivalent to ADNOC plus 40 cents a barrel on a free-on-board basis.
Among other Middle East crude deals, a European major was heard to have bought an August-loading Banoco Arab Medium crude at a discount of three to five cents to the official selling price.
Maersk, an equity holder of Qatar's Al-Shaheen crude, reportedly sold 1.2 million barrels of the grade for August loading to a European major at spot Dubai quotes minus 30/minus 35 cents a barrel. In the regional sweet crude market, soft demand from Japanese utilities was putting downward pressure of spot premiums for August-loading Minas crude.
Traders said 100,000-200,000 barrels of August Minas was sold to a Chinese trader at the Indonesian Crude Price (ICP) plus $1.40 a barrel, 30 to 40 cents down from last deals for July barrels.
A Japanese trader reportedly sold a partial cargo of August-loading Widuri crude to a Chinese buyer, but price details were not immediately available.
August-loading Cossack crude was heard solf by Shell at APPI Tapis plus 40 cents a barrel on Monday, slightly higher than the previous deal at plus 30 cents.