Middle East crude complex rangebound amid mixed fundamentals

Singapore — Middle East sour crude spreads were largely rangebound in Asian trading hours Friday morning, as market participants weighed an uptick in buying activity versus deep discounts fetched for the purchases.

Several tenders were concluded this week at deeply discounted price differentials for Middle East sour crudes; from light sour grades such as Murban to medium and heavy crudes including Upper Zakum, Qatar Marine and Basrah Light.

The April Brent/Dubai Exchange of Futures for Swaps spread widened Friday morning to be pegged at $1.76/b at 11 am in Singapore (0300 GMT), after it had been assessed at $1.63/b at Thursday's 0830 GMT close.

A cargo of Murban was reportedly sold at a discount of around $1.15/b under the OSP, while Qatar Land crude was awarded via a tender at Dubai minus around 50 cents/b, market sources told Platts this week.

Chinese refiners' return to the market failed to keep Oman prices propped up beyond a few days, although it did lift the medium sour grade out of contango territory.

The prompt structure for Dubai crude futures remained in contango, however, as overall Asian fundamentals remained in the favor of buyers and supply looked ample for April loading cargoes.

The March/April crude futures spread for Dubai was pegged at minus 14 cents/b at 11 am on Friday, up from minus 18 cents/b assessed at Wednesday's market close.

The Dubai market structure, a reflection of the spot market, had shrunk to new lows overnight, with the April Dubai cash/futures spread assessed at a contango of minus 44 cents/b, down from minus 31 cents/b Wednesday.

Meanwhile, the forward Dubai futures curve made a slight improvement in backwardation Friday morning. The April/May spread was pegged at 21 cents/b at 11 am in Singapore, which was up from the 18 cents/b assessed Wednesday at 4:30 pm (0830 GMT).