Singapore (Reuters) – The United Arab Emirates will ramp up exports of Abu Dhabi’s flagship Murban crude early in 2024 as a new OPEC+ mandate kicks in and barrels are diverted to the international market owing to refinery maintenance, according to traders and Reuters data.
That will add to increased output of other light sweet crude grades, including from fellow OPEC members Nigeria and Angola and non-OPEC countries such as the U.S. and Brazil.
The factors are weighing on global price benchmarks Brent and West Texas Intermediate , and putting pressure on the Murban spot price.
“The market expects bigger supply of Murban crude next year,” said a Singapore-based trading source, who declined to be identified.
ADNOC did not immediately respond to a request for comment.
The UAE production baseline under OPEC+ agreements is set to rise 200,000 barrels per day (bpd) to 3.219 million bpd in January. At the same time, maintenance work at Abu Dhabi’s 837,000 bpd Ruwais refinery means less crude demand domestically.
OPEC+ is due to hold a ministerial meeting to Nov. 30, when Angola and Nigeria plan to push for higher output.
Oil supplies are currently in deficit, but the International Energy Agency expects that to swing to a slight surplus in 2024, even if OPEC+ nations extend their cuts into next year.
Impact
Spot premiums for Murban crude loading in January slipped to a six-month low of $1.40 a barrel to Dubai quotes on Thursday, Reuters data showed, lower than medium-sour benchmarks Dubai and Oman, which are usually cheaper than the Abu Dhabi grade.
Murban now has the lowest premium of the five grades allowed for delivery on S&P Global Platts’ Market-on-Close platform, which sets physical Middle East benchmark Dubai prices.
Seven Murban cargoes have been delivered this month on the platform, traders said, which is unusual. Typically, heavier grades Oman and Upper Zakum are delivered.
Adding to spot market supply, major Chinese refiner Zhejiang Petroleum and Chemical Corp (ZPC) has sold some of its first-quarter ADNOC term supply, including Murban, said traders.
Some of ADNOC’s term customers could also receive more Murban in 2024 in exchange for a cut in Upper Zakum crude, according to market participants.
Murban faces more competition from arbitrage supplies from the U.S. and the Atlantic Basin, traders said, as Brent prices have fallen to near parity with Dubai this week, down from an average premium of $2.13 a barrel in October.
