CRUDE MOC: Lower offers for Middle East crude cargoes fail to tempt buyers

Singapore — Offers of Middle East sour crude cargoes in the Platts Market on Close assessment process Monday continued to move lower amid a dearth of buying interest in the spot market.

ExxonMobil and Total each offered a cargo -- of 500,000 barrels -- on the MOC, moving their prices down to new lows. Buying interest, however, remained absent with product margins weaker on heavy corrections to oil demand.

"There was very very little demand this month," a Singapore-based crude trader said.

"Refiners cannot shift products, so sellers [either should have] sold already or it becomes a case of offering down or holding for storage," he said.

ExxonMobil, which offered a May-loading cargo of Upper Zakum crude, moved its offer from an initial discount of $1/b to the OSP, to a final offer of minus $1.10/b. The offer failed to tempt any buyers, who have also seemed reluctant to pick up cargoes of the medium sour grade in the spot market this month, according to traders.

Meanwhile, Total offered a cargo of Das Blend crude. The May-loading cargo was also priced against its OSP, with Total's initial offer coming in at a discount of $1.50/b.

The seller moved its offer lower to a final price of minus $2.05/b toward the end of the MOC, without seeing any takers.

Platts assessed the OSP differential for Das Blend at minus $2.10/b on Monday, the lowest on record.

Prices of light sour crude grades like Das Blend have collapsed this month on the back of bleak margins for lighter refined products, such as gasoline, jet fuel and naphtha as daily movement of people, cars and planes closes down on a global scale due to the spread of the coronavirus pandemic.

China, which accounts for around 10% of global oil demand, saw a nearly 42% drop in oil consumption of more than 4 million b/d in February, when the outbreak hit its peak there, according to market estimates compiled by S&P Global Platts.