CRUDE MOC: Sellers tempt refiners with discounted cargoes on MOC

Singapore — Sellers emerged with several March cargo offers during the Platts Market on Close assessment process for Middle East sour crude on Tuesday, pushing prices down into firm discounts in an attempt to lure buyers and kick start spot market trading for the month.

Three cargo offers -- and one bid -- were seen during the Platts MOC on Tuesday, with one cargo offer trading toward the close.

ExxonMobil placed an offer for a 500,000-barrel clip of March-loading Upper Zakum, while Total came in with an offer each for Das Blend and Murban crude grades.

BP stood as the sole bidder in the cargo domain during the MOC, with a bid for March-loading Upper Zakum. All cargo orders are 500,000 barrels in size.

Total lowered its Murban offer from an initial minus 20 cents/b to minus 50 cents/b under the March OSP. This was picked up by BP towards the end the MOC. Total did not return with a second offer on Murban.

This is the first cargo trade of 2020 during the MOC. In 2019, a total 29 cargoes traded on the MOC, of which 17 were Murban, 10 Upper Zakum and two Das Blend.

Meanwhile, Total's offer on Das Blend remained standing at the 4:30 pm close, at a discount of minus 50 cents/b.

Exxon's offer for Upper Zakum came down to a discount of 25 cents/b under the March OSP, while BP's bid stood at minus 35 cents/b as of 4:30 pm in Singapore on Tuesday (0830 GMT). Exxon stipulated March 1-28 as the loading period, and B/L Month pricing terms for its cargo.

Market participants said sellers could be concerned with muted buying interest from Asian refiners halfway into the month, and could be trying to expedite the process by pushing offers down quickly now that refiner linear programs (LPs) have been concluded.

An overhang of light sour crude cargoes may also add pressure to prices for such grades in the current cycle, they said.

Platts assessed the OSP differential at minus 50 cents/b for Murban, minus 55 cents/b for Das Blend and minus 30 cents/b for Upper Zakum on Tuesday.

Meanwhile, the March Dubai cash/futures premium picked up a few notches on Tuesday, assessed at $2.47/b at the end of the MOC. It had been assessed at $2.41/b on Monday.