April 10, 2018 / 9:53 AM / 2 years ago

Sinopec plans to cut Saudi crude oil imports

SINGAPORE (Reuters) - The Middle East crude oil market climbed higher on Tuesday buoyed by firm demand for Dubai partials from Totsa and Glencore.

FILE PHOTO: The company logo of China's Sinopec Corp is displayed at a news conference in Hong Kong, China March 26, 2018. REUTERS/Bobby Yip /File Photo

Higher-than-expected Saudi Aramco crude oil prices, however, has prompted at least one large Asian refiner to cut imports of the grade.

SAUDI ALLOCATION

* China’s Sinopec, Asia’s largest refiner, plans to cut Saudi crude oil imports loading in May by 40 percent after national oil company Saudi Aramco set higher-than-expected prices, an official from the company’s trading arm Unipec said.

“Our refineries think these are unreasonable prices as they do not follow the pricing methodology,” the official, who declined to be named, said on Monday.

Asian oil traders have struggled to understand how Saudi Arabia derived its official selling prices (OSPs) for May after the world’s top oil exporter unexpectedly raised the price for its flagship Arab Light crude sold to Asian refiners.

On a separate note, trading sources at two North Asian refineries said on Tuesday they each planned to reduce May orders from Saudi Arabia by 10 percent.

IRAN OSP

* Iran has set the official selling price (OSP) for Iranian Light crude loading in May for its Asian buyers at $1.30 a barrel above the average of Oman and Dubai quotes, 10 cents higher than the previous month, two industry sources said.

INDIA

* Indian Oil Corp has issued a tender seeking crude oil cargoes for delivery in June and July, a tender document showed.

This follows an earlier requirement by India’s Mangalore Refinery and Petrochemicals Ltd (MRPL), traders said.

WINDOW: Eleven Dubai partials traded, with Totsa and Glencore being the main buyers, trade sources said.

NEWS

* China’s Sinochem Group has hired seven banks to manage a $2 billion Hong Kong stock listing of its key oil assets, three people said, as the state-owned firm shifts to higher-value businesses, including petrochemicals production.

* Saudi Aramco will sign eight deals worth $10 billion with French firms on Tuesday, the chief executive of the state-run oil giant said on Monday - the main contracts expected to be sealed during Crown Prince Mohammed bin Salman’s visit to France.

* Saudi Arabia’s energy minister Khalid al-Falih and International Energy Agency (IEA) director Fatih Birol stressed the need for more investments in the energy sector to meet growing demand, a statement by the energy ministry said on Tuesday.

* Iraq’s top court will begin hearings in May on the legality of oil exports from Kurdistan, which are at the center of a row between the semi-autonomous region and Baghdad.

Reporting by Jessica Jaganathan and Florence Tan, Editing by Sherry Jacob-Phillips

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