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Pacific Crude Oil export to rise in June

Staff Reporter | 12:32 AM | |
Exports of sweet crude and condensate from Australia, Papua New Guinea and East Timor are expected to rise in June, feeding into an already well-supplied regional market, traders said on Monday.
Sweet crude is a type of oil that meets certain content requirements, including low levels of hydrogen sulfide and carbon dioxide. 
Refiners prefer sweet crudes because of the low sulfur content of less than 0.5% and relatively elevated yields of high-value products like gasoline, diesel fuel, heating oil and jet fuel.
As reported by Reuters, between 16 and 18 cargoes of sweet crude and condensate were expected to be available for June loading, compared with 13 next month.
The increased supply is mainly due to exports of light sweet crude grades Kutubu and Cossack rising to three and two cargoes, respectively, in June, up from one each in May.
Oil Search will load two cargoes of Kutubu on June 8-12 and June 19-23, while ExxonMobil will load one cross-month cargo on June 30-July 4.
Two cargoes of Cossack crude, produced from Australia’s Northwest Shelf liquefied natural gas (LNG) project, will be loaded by Chevron Corp and Woodside in the first and last 10 days of the month, respectively.
“Differentials could be weighed by ample spot supply from regional producers, particularly Vietnam, as well as steady inflow of arbitrage shipments from West Africa. And, while demand could pick up, some refiners will still be partly shut for maintenance in June,” traders said. 
Earlier in the month Reuters reported that oil liquids from ExxonMobil’s PNG LNG project will be blended into the country’s only crude blend.
The project will produce about 25,000 barrels per day (bpd) of condensate, a low-density mixture of hydrocarbon liquids that will be blended into the country’s existing export stream, the Kutubu Blend.
Kutubu is normally sold in cargoes of 650,000 barrels with 1-2 cargoes per month exported to regional refiners. 
A trader had said the quality changes would not be significant; however the rise in number of monthly cargoes could make the blend more attractive to regional refiners seeking steady supply of light sweet crude.