Middle East crude complex steady as March spot trading wraps up

Singapore — Spreads for benchmark Dubai crude futures held steady mid-morning Wednesday in Asia, with focus for the Middle East sour crude complex turning to second quarter of 2020, as spot trading wrapped up for March loading barrels in the region.

Intermonth spreads stuck to mid-60s cents/b levels Wednesday morning, not vastly changed from where they had been assessed Tuesday at 4:30 pm in Singapore (0830 GMT) at the close of trading.

The Dubai futures February/March spread was pegged at 66 cents/b at 11 am in Singapore Wednesday (0300 GMT). It was assessed at 67 cents/b Tuesday at the close.

Similarly, the March/April spread was pegged at 65 cents/b Wednesday morning in Singapore, unchanged from Tuesday's assessment. S&P Global Platts provides notional "pegged" values of various prices for crude oil through the day before the final end of day assessment at 4:30 pm in Singapore for Asian markets.

March spot trading was largely concluded, said traders, although some sellers were still seen offering full-sized cargoes of sour crude via the Platts Market on Close assessment process as recently as Tuesday.

ExxonMobil and Total offered 500,000 barrel-sized cargoes of March loading Upper Zakum in Tuesday's MOC process. One of Exxon's cargoes was eventually purchased by Total at a discount of 75 cents/b to the March Upper Zakum official selling price toward the end of the MOC.

Exxon reoffered after Total's purchase, while Total withdrew its own offer of Upper Zakum shortly before it bought Exxon's clip of the medium sour grade.

At the close of the MOC at 4:30 pm in Singapore on Tuesday, two offers of Upper Zakum remained standing, both by ExxonMobil. One was priced at a discount of 75 cents/b under the OSP, while the second cargo was offered at a premium of $2.05/b against Platts front-month Dubai crude assessments.

Upper Zakum is one of the grades deliverable into the Dubai basket, whereby a seller declares one of five grades to the buyer upon convergence of twenty Dubai partials totaling 500,000 barrels (each partial is 25,000 barrels).

Tuesday's MOC also saw a convergence between seller Reliance and buyer Petrochina for March Dubai partials, with Reliance declaring a cargo of Upper Zakum to Petrochina at the end of the MOC. This is the first convergence on Dubai partials for the month.

A total 110 partials have traded so far in January, with 104 of these being Dubai and the rest being Oman partials.

Meanwhile, a total seven full-sized cargoes have changed hands in the MOC over January, comprising one cargo of Qatar Marine, and two each of Upper Zakum, Murban and Das Blend. Each cargo is typically 500,000 barrels in size.