The Middle East crude benchmark spot premium of Dubai declined on Tuesday, while that of Murban extended its gains, after OPEC+ agreed on a less-than-expected output hike for November.

The Organization of the Petroleum Exporting Countries plus Russia and some smaller producers – known as OPEC+ – on a Sunday meeting decided to increase its collective oil production by 137,000 barrels per day, starting in November.

The move was in contrast to market expectations for a more aggressive reintroduction of supply, a sign that the group remains cautious about increasing its production share in the global oil market amid predictions of a supply surplus in the fourth quarter as well as next year, said ING analysts.

However, rising supplies from OPEC+ and non-OPEC+ countries continued to raise expectations of an oversupplied market.

SINGAPORE CASH DEALS

Cash Dubai’s premium to swaps fell 28 cents to $0.73 a barrel.

Mercuria will deliver a December-loading Upper Zakum crude cargo to Mitsui following the deals.

NEWS

Russian deputy prime minister Alexander Novak said on Tuesday that OPEC+ did not discuss increasing quotas after November.

China is building oil reserve sites at a rapid clip as part of a campaign to boost crude stockpiles that increased in urgency after Russia’s Ukraine invasion upended global energy flows and has accelerated this year, according to public data, traders and industry experts.

The Kirishi oil refinery, one of Russia’s largest, has halted a crude distillation unit, CDU-6, its most productive unit, following a drone attack and subsequent fire on October 4, with its recovery expected to take about a month, two industry sources said on Monday.

Shell SHEL expects to report a $600 million hit in the third quarter after abandoning its biofuels project in Rotterdam, bringing total impairments and provisions related to the venture to $1.4 billion, it said on Tuesday.
Source: Reuters