The premium of Indonesian Cinta crude to front-month Brent futures at the Asian close hit a four-month high Tuesday at $4.08/b, on the back of strong spot demand for the medium-gravity crude.
The Indonesian crude grade last traded at similar differential levels on July 6, when it was assessed at a premium of $5.87/b to front-line Brent assessments.
Cinta was assessed at $110.00/barrel Tuesday, up $4.19/b from Monday -- the level where Gunvor's bid for 100,000 barrels for December 1-31 loading was hit by Japanese trader Itochu.
A trader said Gunvor's bid was "unique," as the crude was typically sold through term contracts with limited spot barrels available.
Current term lifters of Cinta are Inpex, Itochu and Mitsubishi, trade sources said, adding that the crude is typically sold into China and Japan.
According to market sources, Cinta crude output is around 20,000-21,000 b/d, with at most 100,000 barrels available in the spot market every month.
The reason for Gunvor's sudden interest in Cinta remained unclear, as fuel oil-rich crudes are currently under pressure. Demand for direct-burning crudes was also tepid, further depressing the medium to heavy sweet crude complex, trade sources said.
Prior to the trade between Gunvor and Itochu, China National Offshore Oil Corporation was heard to still have December cargoes available.
The spread between front-month 180 CST fuel oil and Dubai swaps was assessed at minus $7.84/barrel November 6, near this year's lowest level at minus $8.23/b, recorded October 31, Platts data showed.
Meanwhile, the 380 CST fuel oil crack against Dubai swaps stood at minus $9.54/b on November 6, also close to its lowest recorded this year at minus $9.88/b on October 31.
Market sources said Gunvor's recent interest behind Cinta may be linked to fuel prices in China or the pricing of Chinese crude Daqing. Gunvor declined to comment.
The Indonesian crude is part of the basket of crudes -- alongside Brent and Dubai crudes -- considered by China's National Development and Reform Commission when adjusting domestic retail prices for refined products. It is also used as a pricing basis, alongside Indonesian Minas, for the Chinese Daqing crude.
The Cinta field is located 120 km offshore West Java.
CNOOC is the majority stakeholder in the offshore Southeast Sumatra Production Sharing Contract with 65.5% stake. The other stakeholders include Korea National Oil Company (Sumatra) Ltd and Fortuna Resources (Sunda) Ltd, Pertamina and Itochu.
Cinta, is a low sulfur crude (0.09%) with a gravity of 31.1 API. The crude, which has a high wax content, yields 0.34% LPG, 6.96% naphtha, 8.50% kerosene, 17.00% gasoil and 67.20% fuel oil and residue.
