Middle East, World News

Middle East Oil Falls a Third Day on Slowdown at China Refiners


Middle East Oil Falls a Third Day on Slowdown at China Refiners

Middle East oil for sale to Asia fell for a third day after reports that Chinese refineries are slowing runs.

Murban, produced by Abu Dhabi National Oil Co., for loading in November slid 5 cents to a premium of 38 cents a barrel to its official selling price, according to data compiled by Bloomberg. The price earlier this month reached 63 cents over its official level, the most since May. Qatar Land slipped 5 cents to a premium of 27 cents a barrel, Bloomberg data showed.

Chinese refinery utilization has slipped to the lowest this year as units shut for maintenance. The crude-processing rate declined 2.1 percentage points to an average 77.6 percent of capacity in the two weeks ended yesterday, Shandong-based Oilchem.net reported today on its website, citing its survey of 35 plants with a capacity of about 7.3 million barrels a day, or 71 percent of the nation’s total.

China’s refiners are limited in the profits they can make on their fuel production because the government fixes retail prices. The country’s processors had a combined loss of 4.8 billion yuan ($751 million) in July, the National Development and Reform Commission said in a statement on its website today.

Chinese oil refineries made a profit of 2.4 billion yuan in the first seven months of this year, down 94 percent from a year earlier, according to the statement.

Other refiners in Asia are facing a decline in processing margins. Gasoil’s premium to Dubai crude, a measure of profit, fell today to $16.19 a barrel, compared with $18 a month ago, according to PVM Oil Associates Ltd., a London-based broker.

Oman Crude Drops

Oman crude for immediate loading dropped $1.13, or 1.1 percent, to $103.31 a barrel, Bloomberg data showed. Dubai oil for loading in November decreased 1.1 percent to $102.93. Murban for spot delivery fell 1.1 percent to $107.34.

Oman futures for November delivery climbed $1.55 to $104.30 a barrel on the Dubai Mercantile Exchange at 5:30 p.m. Singapore time, with 1,382 contracts traded. The settlement price was $104.49 at 12:30 p.m. in Dubai.

The November Brent-Dubai exchange for swaps, which measures the European marker contract against the Persian Gulf grade, narrowed 21 cents to $4.65 a barrel, according to data from PVM. The exchange for swaps for December fell 5 cents to $3.76.

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