SINGAPORE, Jan 27 (Reuters) - Key Iraqi export crude Basra Light have been sold at the highest premium in just over a year on expectations of a cut in the grade's price marker, trade sources said on Tuesday.
The grade's official selling price for March is expected to drop by $1 per barrel in line with market changes and this allows buyers to increase the premiums they pay on top of the OSP.
Traders are also more bullish in a contango market as they can store unsold oil and sell it later at higher prices.
"The fact that the contango gives sellers a backstop to store definitely helps," a trader said.
Phillips66 sold 2 million barrels of March-loading Basra Light at a premium of about 60 cents a barrel above its OSP to an unknown buyer, traders said.
Petco, the trading arm of Malaysia's state oil firm Petronas , sold 2 million barrels each to Vitol and Unipec in a tender at premiums between 50 and 60 cents a barrel, they said.
Prior to the tender, Vitol also bought 2 million barrels of Basra Light from Petco, traders said.
Basra Light's premium hit a high at the start of 2014 when Petco sold a February-loading cargo at a premium of 75 cents to its OSP to an oil major, according to Reuters data. (Reporting by Florence Tan; Editing by Gopakumar Warrier)