Dubai futures keep pace with Brent amid Baghdad turmoil

Singapore — Benchmark Dubai crude futures tracked ICE Brent crude higher mid-morning on Friday amid reports an airstrike in Iraq had killed an Iranian military leader.

At 11 am in Singapore Friday (0300 GMT), March Dubai crude futures were pegged at $65.52/b, up from $63.77/b assessed at 4:30 pm Thursday (0830 GMT).

Dubai tracked Brent higher, with the March Brent/Dubai Exchange Futures for Swaps (EFS) spread keeping pace with Brent's upward trajectory. The EFS was pegged at $2.64/b at 11 am Friday, near where it was assessed at $2.65/b on Thursday.

Outright prices for ICE Brent futures jumped more than $2/b after reports an airstrike in Baghdad had killed Iranian General Qassim Soleimani in Baghdad on Friday morning.

At 11 am, March ICE Brent futures were trading at $68.16/b, up from $66.42/b at 4:30 pm in Singapore on Thursday.

The February/March Dubai futures spread also moved higher, pegged at 92 cents/b at 11 am, up from 83 cents/b assessed Thursday.

Iraqi television claimed the airstrike also killed Iraqi militia commander Abu Mehdi al-Muhandas, according to media reports.

The death of Iran's most revered military leader appeared likely to send tensions soaring between the US and Iran.

Meanwhile, the March/April Dubai spread was unchanged at 11 am from its 85 cent/b assessment at Thursday's close.

The crude market in Asia was also mulling incoming official selling prices from producers in the region.

Saudi Aramco released its OSPs for February loading cargoes overnight, cutting light crude prices to Asia but hiking Arab Medium and Arab Heavy price differentials over and above what the market had expected.

Aramco raised the OSP differential for its February Arab Medium grade by 40 cents/b to $2.45/b and Arab Heavy by 70 cents/b to 55 cents/b over Oman/Dubai crude assessments.

Crude traders surveyed by Platts had expected a rollover or a small cut for Arab Medium. Some survey respondents had expected the Arab Heavy OSP to be raised due to a recent rise in fuel oil margins.

Backwardation in the Dubai M1/M3 structure -- or the front-month cash/futures spread -- averaged $2.67/b over December, but dropped sub-$2/b as the front-month rolled over from February to March.

March Dubai cash/futures were assessed at $1.89/b at Thursday's close of the first trading day of the new year.

-- Eesha Muneeb, eesha.muneeb@spglobal.com

-- Avantika Ramesh, avantika.ramesh@spglobal.com

-- Edited by Wendy Wells, wendy.wells@spglobal.com