Mercuria Buys Upper Zakum; Qatar Marine Drops to August 2009 Low

Author: Spencer Ogden
Date posted31/Jan/2012
Author: Spencer Ogden

Mercuria Energy Trading SA bought a cargo of Abu Dhabi’s Upper Zakum crude through the oil-pricing system operated by publisher Platts for a second month, according to a survey of traders who monitor the market.

The Geneva-based energy trader purchased 19 Dubai partial contracts for March loading from SK Innovation Co. (096770), the survey showed. Under Platts rules, the deals must be consolidated into one cargo when the same buyer and seller agree to trade 19 or more of the 25,000-barrel lots during a month. The seller can choose to supply 475,000 barrels of Dubai, Upper Zakum or Oman to the buyer.

Arcadia Petroleum Ltd. today bought nine partial cargoes; seven from SK and two from China International United Petroleum& Chemical Co., known as Unipec (QRAHVZ), the survey showed. SK sold 35 lots during January, accounting for 875,000 barrels of Dubai.

Middle East crude prices have weakened as refining profits have fallen. The premium of gasoil, or diesel, to Dubai crude dropped 30 cents, or 1.6 percent, to $18.63 a barrel, according to data from PVM Oil Associates Ltd., a London-based broker. This crack spread narrowed for the first time in five days.

Two Mideast crude grades were assessed today at the lowest level since August 2009. Qatar Marine (PGCPQRMR) fell for a third day, dropping 2 cents to a discount of 85 cents below its official selling price. Upper Zakum (PGCPUPZK) declined 2 cents to a discount of 50 cents to its official level, according to data compiled by Bloomberg.

Sokol Offer

Japan’s Marubeni Corp. (8002) is offering to sell a 100,000 metric-ton cargo of Russia’s Sokol crude for loading in late-March, according to three traders who participate in the market, declining to be identified because the information is confidential. Earlier this month, BP Plc bought a cargo of the sweet, or low-sulfur, oil from ONGC Videsh Ltd. (ONGC) at a premium of $9 a barrel to benchmark prices.

Dubai crude’s backwardation, when the price for deliveries now is greater than for shipments later, narrowed by 5 cents. Swaps for February were 93 cents a barrel more than April, according to PVM data. The exchange for swaps for March, which gauges North Sea Brent crude’s premium over Dubai, rose 11 cents to $2.80 a barrel today.

The March official selling price for Oman oil will be $110.63 a barrel, based on the average of daily futures settlement prices on the Dubai Mercantile Exchange. That makes the medium-sulfur crude 3 percent more expensive than February’s price of $107.41. Today’s settlement at 12:30 p.m. Dubai time was $110.08, the exchange said.