Crude MOC: April light sour cargoes trade at deep discounts despite OSP cuts

Values of light sour Middle East crude grades have fallen to deep discounts for April spot trading cycle, despite heavy price cuts from crude producers this month, with demand from Asia disappearing as a knock-on effect of the coronavirus outbreak.

A 500,000 barrel cargo of Das Blend crude was bid for by trader Gunvor in the Platts Market on Close assessment process, with a laycan of April 1-30 and B/L month pricing terms.

Japan-based trader Mitsui sold into Gunvor's bid toward the close of the Platts MOC, at a discount of 90 cents/b to the April Das official selling price.

Earlier this month, ADNOC's January OSP differential for Das was cut 90 cents/b month on month, to a premium of $2.76/b over Dubai, but market participants said the OSP may see deeper cuts by the time pricing for April is concluded due to the sharp fall in oil prices to date.

Gunvor had also bid for a 500,000 barrel cargo of ADNOC's other light sour crude, Murban, in Tuesday's MOC. BP sold a Murban cargo to Gunvor at a discount of 65 cents/b under the OSP during Tuesday's process. Shortly thereafter, a Murban offer that had been initially standing at minus 60 cents/b moved down to a discount of minus 80 cents/b by the end of the MOC on Tuesday.

Wednesday's MOC saw Total return with a similar offer on Murban April loading cargoes, with the seller standing at minus 80 cents/b at the 0830 GMT close. Total also had a second offer standing at the close, for 500,000 barrels of April loading Das Blend, also at a discount of minus 80 cents/b.

Trades for April cargoes are yet to be heard in the spot market so far, but buying and selling ideas for light sour crude are hovering in discounts of around minus $1/b to minus 80 cents/b under respective OSP levels.