Prices for May-loading ESPO Blend crude oil hold steady at the start of the new trading cycle as Chinese buyers wait to see how the market moves, reports Nasdaq.
ESPO Blend crude oil cargoes
ESPO Blend crude oil cargoes loading in May traded at discount of $9-10 per barrel to Dubai benchmark on FOB (free on board) Kozmino basis, quite in line with April estimates, they said.
Sellers observed visible demand from India, which ramped up the grade’s buying in April sending the price for the grade up.
Chinese buyers did not rush into making deals though as they waited to see how prices move and for possible changes in business cooperation between Russia and China after Chinese leader Xi Jinping’s visit to Moscow.
Reserved demand from Chinese refiners kept prices for ESPO Blend relatively stable, traders said, but they expected interest for cargoes loading later in May to be higher as Chinese refineries normally raise runs before the summer season.
Chinese procurement interest is back
The DES (delivered ex-ship) prices in Chinese ports for May cargoes are around minus $6.80 to ICE Brent per barrel, one of the traders based in China told Reuters, with the asking prices a bit higher at about minus $6 per barrel.
Market participants use two different price estimations for ESPO Blend depending of the terms of buying – at the Russian port of Kozmino or at the port of delivery.
“A slight price hike won’t hold Chinese procurement interest back as it would still be much cheaper compared to crude from other regions,” the trader said, adding that the key question was if Indian refiners snap up more ESPO cargoes this month or slow their buying.
Freight rates for voyages from Kozmino to Chinese ports were at around $2.2 million, traders said, some four times higher than the cost of the same journey a year ago, before sanctions on Russian oil shipments.
The cost of transport of ESPO Blend to India stood at $3.3 million, traders said
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Source: Nasdaq
