SINGAPORE, Aug 24 (Reuters) - Trade of October-loading cargoes in the Middle East crude market was nearly completed after a sharp turnaround in valuations that drove most grades to premiums from discounts in early August. The restart of a crude distillation unit at Taiwan's Formosa Petrochemical Corp's refinery at the weekend bolstered expectations of strong demand for heavy sour grades from September onwards. Refineries across the region will also increase crude intake in the run-up to winter. The bullish mood also permeated to the condensates market, where Qatar International Petroleum Marketing Co, or Tasweeq, was expected to sell deodorised field condensate (DFC) via tender at premiums as high as $2.50 a barrel to Dubai quotes, up from premiums as low as $1.70 last month. Middle East condensate was still getting support from a wide premium of Brent over regional benchmark Dubai, as a quick resumption of Libyan output remained far from certain. This maintained a competitive advantage for Qatari grades over Australian Northwest Shelf (NWS), traders said. Perception of a tight condensate market also crystalised on expectations of a limited number of cargoes to be sold in Tasweeq's tender. Naphtha and gas oil margins remained strong, sending values of Qatar low sulphur condensate (LSC) to premiums of between $1.20 and $1.30 a barrel to Dubai quotes, traders said. Oman crude cargoes were seen ending the month at premiums larger than 60 cents to Dubai quotes, up from discounts deeper than 30 cents at the start of the month. Abu Dhabi Murban was one of the few grades to weaken recently, slipping to a premium as low as 10 cents a barrel to the ADNOC official selling price from above 30 cents last week. The grade's high quality makes it a competitor with Brent-related grades, which are expected to weaken with a return of Libyan production. * EAST-WEST - The Brent/Dubai Exchange of Futures for Swaps (EFS) for October fell by 10 cents to $4.45 a barrel at 0830 GMT, Reuters data showed, down from levels above $5 last week, before the Libyan rebels' decisive advance against Muammar Gaddafi. The front-month EFS on June 15 touched $9.20, the highest intraday value since the spread reached a record of almost $12 in October 2004. * DME OMAN - October Oman traded on the DME added 4 cents to a premium of 64 cents 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 - China urged a "stable transition of power" in Libya and said on Wednesday it is in contact with the rebel National Transitional Council, the clearest sign that Beijing has effectively shifted recognition to forces poised to defeat Muammar Gaddafi. - A Libyan rebel government would honour all the oil contracts granted during the Muammar Gaddafi era, including those of Chinese companies, Ahmed Jehani, a senior rebel representative for reconstruction told Reuters in an interview. - India's Reliance Industries has abandoned plans to develop an offshore oil exploration block in Oman six years after signing a production sharing agreement with the government, an oil and gas ministry official said. * CRACK SPREADS - Fuel oil's September crack widened 9 cents to a discount of $5.20 a barrel to Dubai crude, while the October discount also weakened 8 cents to $5.99. - Gas oil's September crack inched up 9 cents to a premium of $17.73, while the October crack was also 11 cents higher at a premium of $18.00 a barrel to Dubai crude. - Naphtha's September and October cracks to Brent both widened 12 cents to a discount of $4.37 and $4.34 a barrel respectively. * OUTRIGHT PRICES - October ICE Brent LCOc1 was at $108.92 a barrel at 0830 GMT, down 7 cents from Tuesday. (Reporting by Alejandro Barbajosa; Editing by Alison Birrane)

Source