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Sources say that Asia is increasing its imports of US WTI oil as Middle East oil prices increase.

Trade sources say that Asia will increase imports of U.S. West Texas intermediate crude in the fourth-quarter after Middle East oil price increased and opened arbitrage window.

They said that the price gap between light-sweet U.S.WTI oil and Middle East crude benchmarks Dubai & Murban has narrowed this month due to strong demand in Asia for high-sulfur oil.

WTI's Arbitrage to Asia has been open for the last week for cargoes that arrive in early November. This was stated by June Goh, senior analyst at Sparta Commodities.

Sources said that U.S. oil producer Occidental sold WTI crude to Japanese refiner Taiyo Oil. One source said that the cargo was sold for a premium of $3.50 per barrel over October Dubai prices, and would be delivered in October.

A Singapore-based trader stated that WTI crude oil could be sold at a price 50-75 cents per barrel less than Murban oil of similar quality to refiners in north Asia, depending on the supplier.

Two other traders claim that WTI is 30 cents less expensive than Murban light-sour grade.

Sources confirming the benchmark said that Murban's supplies have also been tightened as Abu Dhabi National Oil Co has reduced its exports of its flagship grades by diverting oil to its own domestic refinery.

Goh stated that "we anticipate more Asian buyers will secure WTI cargoes, especially as Murban looks expensive while taking the opportunity to diversify their portfolio against AG (Arabian Gulf crude)."

She said that the threat of U.S. president Donald Trump to impose secondary duties on countries who buy Russian oil also supports Middle East crude price. Indian refiners are likely to look to purchase oil from Gulf in order to replace Russian supplies.

Trump shortened the deadline by which Moscow must make progress in a peace agreement for the Ukraine war or face secondary tariffs of 100 percent on its oil customers within 10 to 12 business days. This reflects his increasing frustration over Russia's actions. China, India and Turkey import the most Russian crude.

(source: Reuters)