Asia crude oil: Key market indicators for Feb 14-18

Crude oil futures are expected to remain bullish this week Feb. 14-18 on the back of fresh tensions on the Russia-Ukraine front after the US issued further warnings on Feb. 11 and over the weekend of an impending attack, sending oil prices to settle more than $3/b higher on Feb. 11.

Crude oil futures were trading sharply higher at the start of the new week ending Feb. 18. At 0200 GMT Feb. 14, front-month April ICE Brent crude futures stood at $95.73/b, up $1.29/b (1.37%) from the Feb. 11 settlement.

Middle East Crude

** Spot trade for April loading crude is expected to peak this week with several tenders expected. Eyes are on Qatar Energy's monthly tender offering its Al-Shaheen crude.

** Spot differentials could be higher this month especially for medium, sour grades as a tight sweet crude market could prompt refiners to shift their buying interest towards medium and heavy grades.

** Tenders for Russian ESPO Blend crude are also expected this week with differentials likely to surge this month amid stronger demand cues.

** Market participants will keep an eye on arbitrage crude into Asia as medium, sour grades such as Mars were heard offered at competitive prices. A lower volume of arbitrage crude could tempt buyers and pressure the sour complex.

** Dubai cash-futures, or M1-M3, averaged $3.53/b in the week ended Feb. 11, against $3.04/b in the week ended Feb. 4.

** Intermonth spreads were wider during mid-morning trade Feb. 14 with April-May pegged at $1.48/b, up 25 cents/b from the Asia close Feb. 11.

** April Brent-Dubai Exchange of Futures for Swaps was pegged at $5.63/b mid-morning Feb. 14, up from $4.78/b at the Feb. 11 close.

Asia Pacific Crude

** Market participants are awaiting trade activity for April-loading barrels of Australia's North West Shelf condensate, while keeping a close watch on overhang condensate barrels from the March-loading cycle.

** Spot and term tender results for April-loading barrels of Qatar's DFC and LSC will likely be announced later this week.

** Traders will be keeping a lookout for results of Indian ONGC's second Far East Russian Sokol crude tender this week, following an on the month jump in cash premiums from the first April-loading deal.

** The April-loading programs for Australia's Ichthys Field Condensate, Cossack and Papua New Guinea's Kutubu Blend are expected to be known this week.

** Traders will be looking out for the April-loading program of Malaysia's Kimanis crude and tender activities from Vietnam's PV Oil.

** Market participants will also be keeping a close watch on the results of Malaysian Petco's second March-loading tender for heavy sweet crude Dar Blend. The first cargo traded at premiums that were higher on the month amid sturdy LSFO cracks.

Delivered Crude

** Arbitrage flow of the US' WTI Midland crude into Asia remains in focus, while sweet crude tender activity from Taiwan's CPC Corp. may emerge later this week.

** Market participants await fresh trades on May arrival barrels of Brazil's Tupi crude to Asia, as sentiment ticked higher amid strong western demand.

Crude Futures

** The latest surge in oil prices will add further impetus for the US and other oil consuming nations to find ways to cool surging consumer prices. Iranian nuclear talks, a deal which could add close to 1 million b/d of oil to export markets, appeared to have hit a stumbling block over the weekend.

** In the week ended Feb. 11, the international crude oil benchmarks were higher with the April contract for ICE Brent futures up 1.3% on the week to settle at $94.44/b, while the March contract for NYMEX light sweet crude was 0.9% higher at $93.10/b.