Mideast November crude prices hit record high

The Middle East crude market was steady on Monday as producers Kuwait and Iran followed Saudi Arabia in raising their official selling prices for some grades to a record high in Asia.

Saudi Aramco will supply full contracted crude volumes in November to at least four term buyers despite the high premiums.

"The other producers are taking their lead from the Saudis. Whether these prices can be sustained for December will depend on whether the cracks can hold up," said a Singapore-based trader.

Yemen also set what was likely to be a record premium for its Masila crude for December loading, while Iraq hiked the price of its Basara Light crude to Asian customers to a premium of $1.65, 15 cents above market expectations.

With the OSPs out, spot trading is likely to pick up this week and give a clearer sign of the market's direction, traders said.

The impact of Shell's Singapore refinery outage could fade after industry sources said the oil major is restarting the largest of three crude distillation units.

It was still unclear whether the restart was successful or at what rates the refinery would be running at. An extended outage at the oil major's 500,000 barrels per day refinery could lead to stronger refining margins and support demand for December spot cargoes later this month, traders said.

Shell had cancelled the loading of 4 million barrels of Saudi crude in October after it shut down the refinery due to a fire.

Brent crude's premium to the Middle East marker Dubai rose on Monday to its highest level in more than three weeks after the European benchmark strengthened on tight supplies and as fears of a double-dip recession eased.

Saudi Arabia, the world's top crude exporter, will supply fully contracted volumes of crude oil in November to at least four Asian term buyers, steady with October, industry sources familiar with the matter said on Monday.

The steady supply comes as the Opec kingpin raised the official selling price (OSP) for at least two grades to record highs after a strong trading month for November cargoes.

Saudi Arabia made no changes to the operational tolerance in the supply allocation, the sources added, meaning buyers have the option of asking for cargoes to be loaded with up to 10 per cent more or less crude than contracted.

Iran has raised to a record high its official selling prices for November loading crude to Asia, tracking similar hikes by other Middle East producers expecting strong demand, traders said on Monday.

Iraq raised the price of Basra light crude to US buyers for November by 10 cents to a discount of $1.60 per barrel below the Argus (ASCI) benchmark but cut prices to Europe, the State Oil Marketing Organisation (Somo) said.

Kuwait raised the official selling price (OSP) for its crude oil sales to Asian buyers for November to a record high at 90 cents a barrel above the average of Oman/Dubai quotes, a trade source familiar with the matter said on Monday.

Yemen set the official selling price of its Masila crude for loading in December at a premium of $1.33 a barrel to dated Brent, the government said late on Sunday.

December Oman traded on the DME slipped 2 cents to a premium of $2.32 to Dubai swap quotes at 0830 GMT, using the settlement price for DME futures, the ICE one-minute marker for Singapore and the Brent-Dubai EFS as calculated by Reuters.

Front-month Brent/Dubai Exchange of Futures for Swaps (EFS) for November rose 75 cents from Friday to $5.80 a barrel.

Complex processing margins for Dubai in Singapore were around $9.95 per barrel, down from an average of the last five days of $11.87, Reuters data show. Over the last year, the average margin has been around $7.79 per barrel.

Fuel oil's November crack widened 14 cents to a discount of $4.13 a barrel to Dubai crude. Gas oil's November crack fell 38 cents to a premium of $16.68 a barrel to Dubai crude.

The naphtha CFR Japan front-month crack widened 92 cents to a discount of $9.50 a barrel to Brent.