CRUDE MOC: Sellers unload 2 million barrels of Middle East crude in Monday's MOC

Singapore — Sellers of Middle East sour crude took advantage of a spike in buying interest from Chinese oil major Petrochina Monday, offloading more than 2 million barrels of various Middle East sour crude grades in the Platts Market on Close assessment process.

Petrochina as the lone buyer purchased a 100 partials -- or 2.5 million barrels of Dubai and Oman crude, with four deliverable cargoes totaling 2 million barrels on convergences for Dubai partials.

Among the deliverable cargoes declared by the various sellers, Petrochina received a cargo of Dubai crude from BP, one of Al-Shaheen from Unipec and two cargoes of Murban crude from Shell by the conclusion of Monday's MOC.

Under the partials trading mechanism, the seller declares a full 500,000-barrel cargo to the buyer after 20 partials have been traded for the same loading month between the two companies.

For Dubai partials, the seller has the option to deliver a Dubai, Oman, Upper Zakum, Al-Shaheen or, with a quality premium, Murban cargo to the buyer.

The quality premium for May-loading Murban crude oil is $0.8745/b, and will be effective for trade in May-loading cargoes during the Platts MOC assessment process through March.

After Monday's MOC, the total partials count for Middle East stands at 142, divided into 131 Dubai and 11 Oman partials. No convergences have taken place yet for Oman crude.

These are the first convergences in the MOC for March, and the first Dubai cargo declared on a convergence in the MOC since 2016, according to Platts records.

Murban was last declared as a convergence cargo in June 2019, while two Al-Shaheen cargoes were declared in the MOC during February this year, for the April trading cycle.

February also saw eight standalone cargoes -- 500,000 barrels each -- of Middle East crude change hands via the MOC, four for Das Blend and two each for Murban and Upper Zakum crude.

No cargoes have traded in the March MOC thus far, although several bids for Murban and Das Blend cargoes were seen earlier this month. The bids emerged after ADNOC sought to adjust its official selling prices to compete with other, cheaper crudes available to the Asian market.

Meanwhile, the May Dubai cash/futures spread ticked down to minus $2.49/b at the end of Monday's MOC. It had been assessed at minus $2.41/b Friday.

The spread plunged past minus $2/b earlier this month, following deep price cuts for Saudi Aramco's crude barrels termed to Asian buyers.

Aramco set the price of its Arab Light crude grade loading in April for Asian customers at a discount of $3.10/b under the average of Dubai and Oman crude assessments.