Crude MOC: Murban, Das cargoes offered at 12-year lows in Tuesday's MOC

Singapore — May-loading cargoes of Abu Dhabi light sour crudes offered in Tuesday's Platts Market on Close assessment process sank to discounts reminiscent of spot market differentials during the economic crisis of 2008, following price cuts from ADNOC deemed insufficient by the wider market.

France's Total – an equity holder in both Murban and Das crude production out of Abu Dhabi oil fields – offered a 500,000 barrel clip of each grade in the MOC, initially starting at discounts of minus 70 cents/b under the May OSP.

Earlier in the day, market sources had told Platts that insufficient price cuts from Abu Dhabi would likely result in price differentials for the crudes sinking to new depths in the May trading cycle.

"Their grades will take a pretty massive beating on the spot market this month," said one trading source.

In the MOC, Total's offers moved down in step for both grades, down to discounts of $1.40/b to the OSP. No buying interest was seen for either by the end of the MOC at 4:30 pm in Singapore (0830 GMT).

"I don't think refiners will touch light sour [crudes, such as Murban], unless it's Saudi [Arab Light and Extra Light]," one trader said, while speaking of price margins that refiners would reap by buying the Arab grades that were slashed by $6/b month on month.

The Murban spot price differential was assessed at minus $1.45/b on Tuesday, its lowest since October 10, 2008, when the differential fell to minus $1.80/b, Platts records showed.

By comparison, ADNOC cut its OSPs by $1.63/b for Murban, Das and its remaining two grades.

Meanwhile, May cash Dubai's discount to futures continued to drop deeper into contango, touching minus $2/b on Tuesday by the close at 4:30 pm.

The May Dubai cash/futures spread – also known as the Dubai M1/M3 structure and tracked as an indicator of sentiment for Middle East crude – had been assessed at minus $1.92/b on Monday.

The spread has averaged minus 73 cents/b in the first 10 days of March so far, already sinking below the monthly average of minus 2 cents/b for February, Platts data showed.

Tuesday's close brought the spread to the lowest since minus $2.10/b on January 26, 2016, according to S&P Global Platts data.