Middle East crude gained a lift on Tuesday after a Japanese refiner bought a May Abu Dhabi cargo, making a spot purchase for the first time in two months, traders said.
Japan's top refiner Nippon Oil Corp bought May-lifting Umm Shaif crude at a premium of between 10 and 15 cents a barrel to ADNOC from a Japanese trading firm, traders said. Both companies declined to comment on the deal. Traders said Nippon Oil was seeking a few more spot cargoes, possibly distillate-rich Abu Dhabi grades.
"The price level is lower than the market had expected. But that a Japanese refiner came into the market gives a strong support to the market," a trader said. Traders expected other Japanese refiners to follow Nippon Oil to buy some spot cargoes.
The unexpectedly late arrival of cold snaps in Japan boosted use of heating kerosene across the country and reduced inventories of the fuel even more sharply after the firms had increased exports after the warmest December-February winter season.
Benchmark May Oman had not been discussed. Traders said Qatar Petroleum was heard to have awarded three 600,000-barrel cargoes of al Shaheen for May lifting at discounts of about $2.70 a barrel to Dubai spot quotes. Buyers included South Korean and Chinese oil companies. It was not clear if a United States major had bought one of them as well.
Deals were not confirmed. The levels were mostly in line with prices paid for Maersk's lots. Maersk's al Shaheen lots for May had initially been heard sold at discounts of $2.40/$2.60 to Dubai spot quotes. But discount levels had emerged on Tuesday at $2.60/$2.90.
The Brent/Dubai Exchange of Futures for Swaps (EFS) was valued at $2.33 and $2.43 a barrel for May, mostly steady from $2.39 on Monday. Late on Monday, India's state-run Bharat Petroleum Corp (BPCL) has issued a tender to buy sour and sweet crude for May and June loading.