SINGAPORE: Premiums for January-loading Kimanis cargoes rose on Friday on keen demand for middle distillate-rich grades during winter.
Refining margins for middle distillates rise during winter as demand for heating oil peaks in the cold weather.
January premiums for middle distillate-rich Kimanis crude rose into the high-$3.00 a barrel to dated Brent, compared with trades for December-loading cargoes in the mid-$3.00 last month.
Petroleum Brunei sold its Jan. 1-5 Kimanis crude cargo via private negotiation at the premium in the high-$3.00 to dated Brent, four trading sources said. Details of the buyer were not immediately available.
It is the first time the Brunei oil firm has sold the Malaysian grade via private negotiation since it began marketing it in late 2014. It had previously sold its Kimanis crude cargoes via tender.
Petroleum Brunei is likely to have adopted the new marketing method as “demand in this month is quite strong”, a trading source said.
Six of the eight 600,000-barrel Kimanis cargoes that are scheduled to load in January have been committed, sources with knowledge of the deals said. The availability of both Shell January Kimanis cargoes were not immediately known, but the refiner is expected to keep at least one of the cargoes for its refining system.
ExxonMobil is likely to have awarded its Indonesian Banyu Urip crude sell tender at around $3.50 above dated Brent. A Chinese teapot refiner is understood to have taken the cargo, but deal details remain sketchy. Banyu Urip is also rich in middle distillate yields.
On the regional condensate market, traders are awaiting details about various tender awards. Details for the Petronas-issued Muda and Cakerawala condensate sell tenders and Pertamina’s January-June term condensate import tender remained unclear. The Indonesian state-controlled oil firm is not expected to issue a retender for the cargoes, a source close to the matter said.
Brent’s premium to Dubai swaps, or Brent-Dubai Exchange of Futures for Swaps (EFS) <DUB-EFS-1M>, was at $1.86, down 13 cents for January. The EFS is at its narrowest since October 2015.
