The Asia-Pacific crude market stayed weak on Monday on the prospect of more supply in August, as Vietnam is set to offer spot Dai Hung for the first time in 10 months.
– PV Oil will this week offer spot Dai Hung crude for August loading after a 10-month break, and plans to sell the grade on a dated Brent pricing basis for the first time, trade sources said.
PV Oil may sell up to two 300,000-500,000 barrel cargoes of Dai Hung crude for August loading in the tender and will seek bids for the grade at differentials to the dated Brent price marker instead of the Minas formula, traders said.
The grade is usually processed at Vietnam’s only refinery, which has been unexpectedly shut since mid-May for repairs. Nearly 7 million barrels of Bach Ho crude was sold following the outage, an export surge which jolted the Asia-Pacific crude market in July.
– Sakhalin Energy offered 730,000 barrels of Vityaz for August 28-September 4 loading in a tender that will close on Wednesday and stay valid until a day later.
Japan’s decision to restart two nuclear reactors idled for safety checks after the Fukushima catastrophe won’t cut the country’s spiralling fossil-fuel import bill unless more nuclear units are brought back on line, traders and analysts said.
“It’s still not going to make a huge impact in reducing oilv demand, which will rise in the next few months, when power demand is higher,” Alex Yap, oil analyst at FACTS Global Energy said.
Japan’s demand for direct-burning crude and fuel oil may rise as much as 900,000 barrels per day (bpd) without more reactors operating, up from a peak of 700,000 bpd in February, before the last unit shut down in May, he said.
Yet JBC Energy analysts expect Japan utilities to maximise LNG usage while reducing oil consumption when the reactors are back online.
“We see Japan maxing out LNG burning at an average 1.54
million barrels of oil equivalent per day (boepd) over the July-September period, while consumption of crude and fuel oil will be a bit less spectacular at about 580,000 bpd over the same time,” the Vienna-based consultancy said in a daily note.
* MARKET NEWS
– Vietnam’s only oil refinery, the Dung Quat facility, may delay its restart to early July from late June after a six- to seven-week shutdown, a senior executive said.
– CNOOC, China’s third-largest state-run refiner, has started building a 60,000-barrel-per-day crude processing facility in eastern China to boost its still nascent refining and fuel marketing business in the world’s second-largest oil market.
– Japanese refiner Nansei Sekiyu KK, wholly owned by Brazil’s Petrobras, said on Monday it would temporarily suspend all marine operations and truck shipments at its 100,000 barrels per day Nishihara refinery in Okinawa, southwestern Japan, as a very strong typhoon approaches.
CRUDE Price Prev Change AUG Brent 97.44 97.69 -0.25 AUG Brent/Dubai EFS DUB-EFS-1M 2.60 2.91 -0.31 PRODUCT CRACKS Price Prev Change JULY fuel oil crack -1.51 -0.57 -0.94 JULY gasoil crack 15.76 16.07 -0.31 AUG naphtha crack -12.27 -12.41 0.14 COMPLEX REFINERY MARGINS Today 5.11 Last 5 days 6.22 Last 365 days 7.45