Middle East market strengthens as oil demand rises
China's oil demand in March rose 7.6% from a year ago
The Middle East crude oil market strengthened on Wednesday as demand in Asia went up and region's supply tightened, Reuters reports.
China's oil demand in March rose 7.6% from a year ago, as refinery throughput hit a record high due to continued strength in gasoline and kerosene consumption in the world's largest energy consumer.
South Korea's imports of Iranian crude doubled in March from a year earlier despite dropping by 16% in the first quarter of 2015 compared to the same period last year to comply with international sanction requirements.
Middle East crude oil was selling at lower discounts from the previous months with Qatar's Maersk selling three cargos of al-Shaheen crude for June at 40-50 cents a barrel below Dubai levels, versus discounts of $1.50-$1.90 a barrel in May.
China's Unipec sold two cargoes in a tender on Tuesday at slightly lower levels than Maersk, while Formosa bought 1mn barrels of June-loading Oman crude at 55-60-cent discount
The Taiwanese refiner is seeking 2mn barrels of Iraqi Basra crude in a tender which closes on Friday.
Even as demand is showing signs of increase, the global oil markets may take longer to recover than expected due to a surge in OPEC supply and a potential rise in Iranian exports, the International Energy Agency said in a report today.
US domestic crude production will also rise even more than projected a year ago, despite the rout in prices.