Middle East Crude-Benchmarks extend decline; Mercuria steps up sales

Middle East crude benchmarks Oman and Dubai extended decline on Friday amid abundant supply of November-loading cargoes while several trading firms, led by Mercuria, stepped up sales on the Platts window.

Mercuria and Sinochem delivered one cargo each of Upper Zakum crude to Vitol following the deals on the window.

This marked the 24th cargo delivered by Mercuria so far this month.

"It's definitely weakening," a refining source said, referring to the benchmarks, adding that there are many spot cargoes being offered.

Meanwhile, freight rates for Very Large Crude Carriers soared to their highest in more than two years, according to industry sources and LSEG data, as tanker supply tightens with a rise in Middle East exports and more arbitrage supplies to Asia.

Chinese and Indian refiners are expected to ramp up runs in the coming months ahead of the Golden Week and Diwali periods, supporting long-haul Atlantic-to-Pacific trades, Vortexa freight analyst Wanying Zhang said, adding that voyage counts are already exceeding seasonal norms.

"While current levels, near three-year highs, may ease somewhat, the combined effect of seasonal Asian demand, reduced fleet availability, and long-haul tonne-mile expansion provides a firm underlying floor for VLCC earnings into the fourth quarter," Zhang said.

SINGAPORE CASH DEALS

Cash Dubai's premium to swaps fell 34 cents to $2.62 a barrel.

PRICES ($/BBL)

TENDERS

Indian Oil Corp IOC has bought 2 million barrels of U.S. West Texas Intermediate Midland crude from Totsa for November delivery via a tender, trade sources said.

The WTI cargo was sold at about $3.50 a barrel above dated Brent on delivery at port basis to Vadinar, one of the sources said.

Separately, Hindustan Petroleum Corp HINDPETRO bought 2 million barrels of West African crude for end-October delivery via a tender, trade sources said.

The cargo of 1 million barrels each of Nigerian Bonny Light and Angolan Pazflor was sold by Shell SHEL, they said.

Prices were not immediately available.

NEWS

Russia has increased its planned oil loadings from the Baltic port of Ust-Luga and the Black Sea port of Novorossiisk for September, following disruptions at its main western outlet, Primorsk, two sources familiar with the schedule told Reuters.

Kuwait's Oil Minister Tariq Al-Roumi said on Thursday he anticipated higher oil demand following this week's U.S. interest rate cut, particularly from Asian markets.

Santos STO boss Kevin Gallagher said on Friday he has no plans to retire and expects a sharp jump in cash flow in the next few years to boost the Australian gas producer's shares, after its third suitor in seven years scrapped a takeover bid.

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