?indonesia short of oil-minas now $78
Quote:
Originally Posted by
Lion
Whew, thanks digger, you had me nervous there for a second!
Oil prices mixed in the last day, WTI & Brent down a little, but Tapis up 2% today - I don't think this rise has finished yet.
Minas is up too. Does anyone know why Minas rose $11 in one day on 1st June, leaping over Tapis and staying above since? Must be a reason.
This might help you understand-a cut and paste from -july 2008
Indonesia, a net exporter until two years ago and had this year decided to withdraw from OPEC, expects output to fall to 927,000 bpd in 2008, and keeps exporting less as it has to feed rising fuel demand seen at 1.2-1.3 million bpd.
Some sellers are already shying off Minas as a marker due to its wide price swings between months, as they seek to placate buyers seeking a more stable benchmark like the North Sea Brent basket, even though it is halfway around the world.
"Minas is very choppy. And of course refiners are unhappy with this high Minas price," said a trader with a refiner, who declined to be named on company policy.
Benchmark switches take time, but industry sources say a move to Dated Brent would not be seen as negatively as before.
"I don't think Asia-Pacific refiners have a fear of using Brent now the way they did five or 10 years ago, especially Korean, Japanese and Chinese refiners," said a consultant who requested anonymity.
But he said buyers are unlikely to ask specifically to shift from Minas pricing, especially for Indonesian crude trades.
Heavy sweet Minas is usually valued below bellwether light sweet Brent, which yields higher-quality products. But the lack of spot barrels means the Indonesian crude can be bid daily without facing offers, driving up its price.
For instance, trading firm Mercuria has bid for 100,000 barrels of Minas daily at up to $4 a barrel above Brent futures LCOc1 since early July, but has not met any offers so far.
Between 2004 and 2008, Minas Indonesia Crude Prices (ICP) were on average $1.40 below Brent. But the June Minas ICP -- the average of quotes by reporting agencies Platts and RIM -- rose to a record of $135.51, around $1.75 above Brent prices.
It was also $1.16 above the official price for light sweet, higher grade Tapis, the second time in three and a half years Minas was valued over the Malaysian crude, Reuters data show.