CRUDE MOC: Dubai gains; Murban surges on buying interest

New York — The Middle East crude complex firmed up March 5, a day after the OPEC+ alliance surprised markets with a decision to roll over production cuts for April, while premiums for light sour Murban crude rallied on strong buying interest for Abu Dhabi's flagship grade reported in the Platts Market on Close assessment process.

S&P Global Platts assessed benchmark May cash Dubai at a premium of $1.28/b to the same-month Dubai futures at the 4:30 pm Singapore close on March 5, up by 28 cents/b from the day before.

The Platts MOC process witnessed its first trade of Murban crude partials since February 2019, with Gunvor selling 25,000 barrels of the grade to Total at $67.30/b.

The buying interest from the French oil major lifted May Murban to a premium of $2.16/b against front-month Dubai futures, up from $1.26/b March 4.

The Platts Market on Close assessment process on Mar. 5 saw a total of seven partials of 25,000-barrel each traded, consisting of six May Dubai partials and one May Murban partial.

The market is now looking ahead to the issuance of official selling prices by major oil producers in the Middle East, which are expected to come over the weekend, before trade for May-loading barrels kicks off.

After the OPEC+ announcement, OSPs for light grades were widely expected to increase by around 20 cent/b, while OSPs for medium and heavy grades were expected to be rolled over or reduced marginally.

"Last month, premiums for light grades trended higher since cracks for naphtha and gasoline were strong. The trend should continue this month," said a trader with an Indian refinery.

Arbitrage threats are also dulled in the near term by a wide Brent/Dubai spread that makes Dubai-linked grades more attractive for Asian buyers, traders said.

The May Brent/Dubai Exchange of Futures Swaps, or EFS, was assessed at $2.53/b at the 4:30 pm close in Singapore (0700 GMT) on March 5.

"By the end of next month, we might be able to see more US barrels coming into Asia as the weather [in the US] gets better, but not too soon," said a trader at a North Asian refinery.