The Middle East crude market weakened on Monday, as Oman crude futures extended its losses from last week on excess supply in the region. Oman futures for June dived 85 cents to a premium of 50 cents a barrel to Dubai quotes by 0830 GMT, according to Reuters data.
Sentiment was hit after traders said Shell was still holding Oman cargoes for May which it has not been able to sell. Demand in the region has dwindled during the second quarter as refiners held back due to poor margins.
The weakness in Oman is likely to weigh on other grades, with Abu Dhabi’s Murban crude for June pegged at a discount of near 20 cents a barrel to official selling prices (OSP), down from a single-digit discount last week, traders said.
June Qatar Marine could also trade at a discount of over 40 cents a barrel, down from deals done at a discount of around 10 cents for May cargoes.
India’s oil refining capacity will exceed 6.2 million barrels per day (bpd) by March 2017 from about 4.26 million bpd now, Oil Secretary G.C. Chaturvedi said in a speech delivered to an industry function on Monday.