Asia-Pacific Crude-April Australian heavy sweet crude values fall

03 Mar, 2017

SINGAPORE: April premiums for Australian heavy sweet crude fell amid weaker refining margins for fuel oil and middle distillates, and as the deals were done late in the trading cycle after most refiners had already secured necessary feedstock.

Unipec, the trading arm of Chinese refiner Sinopec, bought an April cargo of Australian heavy sweet Vincent crude at a low-$1.00 premium per barrel to dated Brent. A March-loading cargo of Vincent crude had previously traded at close to $3 per barrel premium to dated Brent.

Premiums for regional heavy sweet crude have weakened amid falling fuel oil refining margins, which have tumbled 450 percent since mid-January when March-loading crude traded, to a discount of around $4 per barrel to Dubai crude.

Singapore refining margins to Dubai crude, which is Asia's key indicator of refinery profitability, dropped to $4.47 per barrel on Thursday, the lowest since August 24.

Japanese oil and gas explorer Inpex sold an April cargo of Van Gogh crude at a premium in the low-$1.00 a barrel to dated Brent late last month, two traders said. The details on the buyer remain unclear and the deal level could not be directly confirmed.

Vietnamese state-marketer PV Oil is likely to have awarded its April Bunga Orkid and Bunga Kekwa sell tender at premiums around $2.50 per barrel to dated Brent. Azerbaijan state-owned trading firm Socar was heard to have bought one of the cargoes, although this could not be directly confirmed.

Malaysian state-owned Petronas had previously sold an April 22-28 cargo of Bunga Orkid crude to trading firm Glencore at a low-$3.00 per barrel premium to dated Brent earlier in the trade cycle.

The Petronas cargo is likely to have achieved a higher premium because of its loading dates in late April, compared with PV Oil's April 2-8 loading cargo of the grade.

Brent's premium to Dubai swaps, or Brent-Dubai Exchange of Futures for Swaps (EFS), was at $1.49 per barrel, up 5 cents for May.

Copyright Reuters, 2017

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