SINGAPORE, June 13 (Reuters) - Saudi Arabia's move to increase oil output dampened sentiment across the Middle East crude market on Monday as the Dubai swaps curve flipped into contango for the first time this month, indicating higher availability of prompt supply. The Brent/Dubai Exchange of Futures for Swaps (EFS) jumped to an intra-day value of almost $8 a barrel in late trade, the highest since 2005, another sign that supplies of heavy sour crude are expected to remain ample in the months to come. A contango, or a price structure where prompt oil is cheaper than for later delivery, set in for the first two months of the Dubai swaps cruve, with July 11 cents cheaper than August as its expiry neared and August one cent cheaper than September. That also weighed on differentials of spot grades, including Oman crude, which was valued at a premium of 60-70 cents a barrel to Dubai quotes, down from about 80 cents last week. Qatari al-Shaheen crude also weakened to premiums of between 60 cents and $1 a barrel to Dubai quotes from Danish producer Maersk, down from $1.30-$1.40 last month. * TENDERS - Qatar International Petroleum Marketing Co, or Tasweeq, has offered to sell six heavy sour al-Shaheen crude cargoes for loading in August, a trader said on Monday. The tender closes on Tuesday and each cargo is 600,000 barrels. [ID:nL3E7HD1GS] * OSPs - Iran has lowered the official selling price (OSP) for July-loading light crude to Asia, while raising prices of heavy grades, a company source said on Monday, in line with changes made by Saudi Arabia last week. [ID:nL3E7HD1C8] - The Middle Eastern producer reduced the price of Iranian Light crude to Asia by 72 cents from June to a premium of $1.71 a barrel over the average of Oman/Dubai, the source said, in line with Reuters expectations. The price of Iranian Heavy was raised by 5 cents to a discount of 68 cents. - Kuwait has raised the official selling price (OSP) for its crude oil sales to Asian buyers for July by 15 cents to a discount of $0.85 a barrel to the average of Oman/Dubai quotes, trading trading sources said on Monday. [ID:nL3E7HD01K] - That was slightly more expensive than the range of expectations in a Reuters survey, and higher than the 10-cent increase for the Saudi Arab Medium grade, to which Kuwait's crude price formula is loosely linked. [ID:nL3E7H610L] - The July price for Iraqi Basra light crude for Asian buyers was set flat against the average of Oman/Dubai quotes compared to a discount of 5 cents the previous month. [ID:nLDE75B06A] * EAST-WEST - The front-month Brent/Dubai Exchange of Futures for Swaps (EFS), an indicator for the premium of light sweet grades over heavy sour supplies, rose 3 cents to $7.70 a barrel at 0830 GMT, the highest since April, when it reached $7.86, the widest in more than five years, Reuters data showed. For a graphic of the EFS and the Dubai forward curve: here * DME OMAN - August Oman traded on the Dubai Mercantile Exchange (DME) fell 6 cents a premium of 65 cents a barrel 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. * MARKET NEWS - An increase in crude output by Saudi Arabia will not change market conditions as demand is for lighter oil than it provides, Iran's OPEC governor was on Saturday quoted as saying, reiterating Tehran's stance that there is no need to boost production. [ID:nPOM137656] - China's oil refineries processed 34.90 million tonnes or 8.22 million barrels per day (bpd) of crude oil in May, up 4.4 percent from a year earlier, data from the National Development and Reform Commission (NDRC) showed. [ID:nL3E7HD0B5] - Japan's utilities burnt nearly a third more natural gas in May than a year go to offset a 32-year low in nuclear plant usage, a trend likely to gain pace this summer as more reactors shut down. [ID:nL3E7HD09W] - Dung Quat oil refinery, Vietnam's first such facility, will expand its capacity by about half to up to 200,800 barrels per day (bpd) by 2017 and import Middle Eastern and probably Venezuelan crude, a senior executive said. [ID:nL3E7HD0EQ] - Titan Petrochemicals Group Ltd is on track to more than double its storage capacity for oil products and chemicals in China in the next few years to feed the country's growing demand. [ID:nL3E7HD0GP] * REFINERY MARGINS - Complex processing margins for Dubai in Singapore were around $8.09 per barrel, down from an average of the last five days of $8.15, Reuters data show. Over the last year, the average margin has been around $6.17 per barrel. * CRACK SPREADS - Fuel oil's July crack narrowed 11 cents to a discount of $7.59 a barrel to Dubai crude. - Gas oil's July crack fell 32 cents to a premium of $20.78 a barrel to Dubai crude. - The naphtha CFR Japan front-month crack narrowed 79 cents to a discount of $12.68 a barrel to Brent. * OUTRIGHT PRICES - July ICE Brent LCOc1 was at $118.80 a barrel at 0830 GMT, down 55 cents from Friday. [O/R (Reporting by Alejandro Barbajosa; editing by James Jukwey)

Source