CRUDE MOC: Middle East structure nearly flat as contango persists in Dubai

Singapore — The Middle East Dubai sour crude pricing benchmark fell Tuesday amid bearish market sentiment, shrugging off a short-lived rebound earlier in the week and flattening out the market structure for the month of February to date.

April cash Dubai was assessed at a 33 cents/b discount to April Dubai futures at the end of the S&P Global Platts Market on Close assessment process Tuesday, as of 4:30 pm in Singapore (0830 GMT). This was down from a 18 cents/b discount for the spread assessed on Monday at the close.

The Dubai cash/futures spread -- indicative of Middle East crude market sentiment for Asian buyers -- has flitted between contango and backwardation for most of this month. However, Tuesday marked the sixth consecutive session for the structure in negative territory, implying a firmly bearish outlook in the spot market.

The structure, often referred to as the Dubai M1/M3 spread, averaged a backwardation of $2.11/b in January. It has since plunged into contango on the back of scarcity of demand for sour crude barrels in Asia for April loading.

The monthly average to date for February moved down to a 5 cents/b backwardation Tuesday, with further downside a possibility as the cycle nears its end by Friday this week.

April cash Oman's spread to April Dubai futures also fell day on day, with demand from China for the medium sour grades largely concluded for April spot barrels, said traders.

The cash Oman/Dubai futures spread was assessed in a backwardation of 26 cents/b at the 0830 GMT Asian close Tuesday, down from 35 cents/b assessed on Monday at the same time.

Meanwhile, the Platts Market on Close assessment process in Asia saw 12 Dubai partials traded Tuesday, bringing the total for the month to 105, of which three have been Oman partials.