Dubai crude futures spreads rangebound as traders digest latest price releases

Singapore — Dubai paper markets treaded in a tight range within the contango market structure, while market inquiries for trading of sour crude picked up in Asia Tuesday morning, following the release of a second round of prices from Middle East crude producers overnight.

The March/April Dubai crude futures spread, which had been assessed at minus 31 cents/b at the 0830 GMT Asian close on Monday, was a few notches up at minus 26 cents/b by 11 am Tuesday morning (0300 GMT) in Singapore.

The contango deepened further along the curve, however, with the April/May spread pegged at minus 21 cents/b Tuesday, compared with the minus 18 cents/b assessment on Monday.

Kuwait Petroleum and Qatar Petroleum both issued official selling prices for their March loading cargoes Monday night. Refiners in Asia will compare these against earlier OSPs issued by Saudi Aramco and ADNOC, before placing their respective buying requirements for April loading cargoes.

Several buyers and sellers started putting feelers into the market Tuesday, testing bids and offers for sour grades such as Murban and Upper Zakum. Spot trades had yet to be heard for the current cycle, as term customers may be waiting for Saudi Aramco's March allocations to be determined first. The producer is expected to confirm March volumes late Monday, one refiner said. Meanwhile, other buyers told S&P Global Platts that they expect trading to kick off towards the end of the week.

State-owned Qatar Petroleum announced OSP for term supplies of Qatar Marine and Qatar Land crude grades for loading in March, with March price differentials for its Qatar Land and Qatar Marine grades at $2.40/b and $2.10/b, respectively, over the average of Platts Oman/Dubai crude assessments.

The announcement marked the first time the Middle East producer has set OSPs prior to cargoes loading -- in line with regional rivals Saudi Arabia and Iraq. Previously, the company announced monthly OSPs as outright values the month after cargoes had loaded.

For March, Kuwait Petroleum Corp. reduced the OSP differential for Asia-bound cargoes of its Kuwait Export Crude blend by 60 cents/b from February to a premium of $1.35/b over the average of Platts Oman and Dubai crude assessments for the month.

The company cut the differential for its other crude grade sold to Asian customers, Kuwait Super Light Crude, or KSLC, by $1.75/b to a premium of $2.90/b over Oman and Dubai assessments.