06-09-2018

Russia’s Oct ESPO Blend crude exports seen rising 13% on month to 2.7 mil mt

Russia’s exports of the medium sweet ESPO Blend crude in October are expected to total 2.7 million mt, up 12.5% from September, the latest monthly loading program showed.

ESPO Blend’s October program runs from September 29 to November 1 and will comprise 27 cargoes of 100,000 mt each, according to the program.
In comparison, the September program, which runs from August 30 to October 1, comprises 24 cargoes of 100,000 mt each, or 2.4 million mt in total.

The October-loading rate will average 582,088 b/d, up from 533,091 b/d scheduled for September.

The program shows that state-owned Rosneft holds 11 cargoes for October, up from 10 seen in the September program and has not yet issued a tender for the October-loading program, market sources said.

Russia’s Surgutneftegaz holds seven cargoes for October loading, similar to the September-loading program.

Surgut has sold all of its October-loading cargoes via two tenders, sources said. Two 100,000 mt cargoes for loading over September 30-October 6 and October 4-9 were sold to a Chinese trading house at a premium of around $2.50-$2.60/b to Platts front-month Dubai crude assessments.

Surgut also sold its remaining five cargoes for loading over October 12-16, October 16-20, October 21-25, October 25-29 and October 27-31 through tender to a Chinese trading house at a premium of $3.60-$3.70/b to Dubai, said sources.

Small producers including Swiss-based Tenergy will hold a total of six cargoes, unchanged from the previous month and Lukoil will hold one cargo, according to the program.

Russia’s Gazprom Neft holds two cargoes according to the program and has sold a cargo loading over October 3-13 through tender to an unknown buyer at a premium of around $2.60-$2.70/b to Dubai, market sources said.

Overall, October-loading ESPO Blend cargoes were sold at premiums of around $2.50-$3.70/b to Dubai, up from premiums of $2-$2.30/b to Dubai for September, due to strong buying interest from China and some specific loading date requirements, market sources said.

“ESPO moved higher in the first half of October due to a shortage of available cargoes,” a Singapore-based trader said. “A lot of the early October scheduled cargoes are due for direct supply to China for term deals there, so [a] lack of available [spot] cargoes pushed [the] market higher,” the trader added.

“The premiums for ESPO are extremely expensive for October loading due to strong buying interest. Premiums are expected to stabilize a bit next month,” another Singapore-based trade source said.

Source: Platts

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