Vietnam's crude offers condensate; Asia-Pacific market awaits tender results

Trade for July-loading regional cargoes remains sluggish as traders adopt a wait-and-see approach ahead of various regional sell tenders that are due to be awarded in the coming days.

An oil drilling platform of the Vietnam National Oil and Gas Group (PetroVietnam) is seen in this file photo.

SINGAPORE, May 19  - Trade for July-loading regional cargoes remains sluggish as traders adopt a wait-and-see approach ahead of various regional sell tenders that are due to be awarded in the coming days. 

July premiums are expected to be steady to slightly firmer than June-loading cargoes that traded last month as demand from Asian refiners is expected to resume after coming out of the seasonal spring maintenance period, traders said. 

But lacklustre refining margins and ample supplies could cap gains, they cautioned. Naphtha refining margins fell to $56.90 per tonne on May 18, the lowest since mid-December. 

Vietnam's Nam Con Son condensate PV Oil is offering three 25,000-barrel cargoes of the Vietnamese condensate grade for loading in July, August-September and November-December via tender. 

The grade is usually bought by domestic end-users because of the small cargo size that make it logistically and economically hard for traders to export, traders said. PV Oil is due to award the two tenders next week, which is later than usual. The regional market often uses these tenders as a barometer of market sentiment.

Malaysia’s Petronas is likely to have awarded its tender for the 300,000-barrel cargo to a trader at a premium around $2 per barrel to dated Brent, although exact details remain unclear. The cargo is understood to have traded at levels steady from a month earlier. 

Trade for the grade remains muted even as a record 11 cargoes are available in July. Three market participants surveyed by Reuters indicated that they saw value for the grade between $1.50-2.00 per barrel to dated Brent.

Woodside sold its July-loading Pluto and North West Shelf condensate cargoes to Shell at a premium of around $1.70 per barrel to dated Brent, traders said. The two grades were sold together and are due to be co-loaded, they added. 

Brent's premium to Dubai swaps was at $0.85 per barrel, up 7 cents for July.

Vietnam's 130,000 barrel-per-day (bpd) Dung Quat refinery will be shut for maintenance as planned from June, the country's government said in a statement late on Thursday. 

After the first OPEC oil production cut in eight years took effect in January, oil traders from Houston to Singapore started emptying millions of barrels of crude from storage tanks. 

Russia's Rosneft, the world's top listed oil company by output, is working to be ready to compete on global oil markets after the deal with OPEC on oil curbs expires, Chief Executive Igor Sechin said on Thursday. 

Halliburton Co, the No. 2 oilfield service provider, expects to raise prices at least 10 percent and in some cases 20 percent or more this year, higher increases than many customers expect but ones that company executives said were crucial to fuel the oil industry's nascent growth.

An OPEC panel reviewing scenarios for next week's policy-setting meeting is looking at the option of deepening and extending an OPEC-led deal to reduce oil output, OPEC sources said on Friday. Is the oil market getting tired of OPEC's verbal intervention? 

The price swings of recent months suggest market players want a big surprise from the Organization of the Petroleum Exporting Countries (OPEC) when it meets on May 25 in Vienna for oil to break above a very tight range around $50 per barrel.

For crude prices, oil product cracks and refining margins, please click on the RICs below. Fuel oil crack Gasoil crack Naphtha crack Complex refining margins


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