CRUDE MOC: Bearish drift pulls cash Dubai, Oman closer to contango

Middle East sour crude benchmarks Dubai and Oman trended down to fresh lows Monday at the end of the Platts Market on Close assessment process, weighed down by sharp selling amid a lackluster buy-side market for crude barrels in Asia.

The April Dubai cash/futures spread was assessed at 5 cents/b at 4:30 pm in Singapore (0830 GMT), a level it last touched on January 9, 2019, S&P Global Platts data showed.

Buying appetite from Asian refiners is practically non-existent at the moment, traders of sour crude told Platts this week. Heavy selling also took place on the Middle East crude paper markets on Monday, with the demand outlook seemingly bleak for April-loading cargoes.

The spread for balance-month February/March Dubai futures was seen bid and offered at 16 cents/b and 30 cents/b, respectively, as of 4:30 pm in Singapore on Monday, while the March/April Dubai futures spread ticked down to minus 31 cents/b at the same time.

Physical activity for Middle East sour crude has yet to kick off, with buyers content to wait on the sidelines, in no rush to procure their April cycle requirements, traders said.

Cash Oman's premium to April Dubai futures fell 26 cents/b from Friday to be assessed at 9 cents/b on Monday evening in Singapore.

Demand for Chinese mainstays such as Russian ESPO Blend crude and medium sour Oman is expected to take a hit this month, with trade and economic activity declining as the North Asian oil importer comes to grips with the coronavirus.

Sixteen April Dubai partials traded in Monday's Market on Close assessment process for Middle East sour crude, bringing the month's total-to-date to 41 partials -- all of these have been for Dubai so far.

Under the partials trading mechanism, the seller declares a full 500,000 barrel cargo to the buyer after 20 partials have been traded for the same loading month between the two companies.

For Dubai partials, the seller has the option to deliver a Dubai, Oman, Upper Zakum, Al-Shaheen or, with a quality premium, Murban cargo to the buyer.