Apr Brent/Dubai EFS slips below $5/b on signs of arbitrage availability

The April Brent-Dubai Exchange of Futures for Swaps spread dropped below the $5/b mark midmorning Singapore Feb. 10 for the first time this month, allowing some arbitrage crude to seek an opening into Asia.

At 11 am (0300 GMT) Singapore, the April Brent/Dubai EFS was pegged at $4.82/b, narrowing 23 cents/b from the Asia close Feb. 9, S&P Global Platts data showed.

The EFS is often tracked as an indicator of North Sea low sulfur crude value versus Middle East high sulfur crude, and a wider EFS makes crude priced against Dubai more economically attractive for Asian refiners compared with Brent-linked ones.

The market sentiment has eased a bit with the Dubai sour crude complex weakening at the Asian close Feb. 9, sources said.

"Some bearish factors [have] started to emerge, but not very sure yet," a trader in Singapore said.

A few arbitrage crude grades, such as US WTI Midland, have been offered to Asian refiners at competitive prices, the trader said.

Arbitrage crudes could pressure the sour crude complex further while demand cues continued to remain strong and spot activity for the month is yet to kick off, sources said.

In other news, Qatar Energy issued its March official selling prices with a hike for Qatar Land and Marine grades.

The producer raised the price for Marine crude by 85 cents/b from February and by 65 cents/b for its Land crude, according to a notice on its website Feb. 10.

Intermonth values were little changed midmorning Singapore.

At 11 am in Singapore (0300 GMT), the March-April Dubai swaps spread was pegged at $1.34/b, narrowing 6 cents/b from the Asian close Feb. 9, Platts data showed. The April-May Dubai swaps spread was pegged at $1.14/b, unchanged from the Asian close on the previous day, the data showed.