CRUDE MOC: Middle East crude spreads fall into 2008 territory

Singapore — Benchmark cash Dubai and Oman spreads hit lows Wednesday last seen in 2008, with demand failing to materialize despite the multi-year lows on crude flat prices and differentials.

Additionally, sellers continued to show full cargoes from the May spot trading cycle in the Platts Market on Close assessment process in an attempt to reach the wider market for Middle East sour crude.

The Dubai cash/futures, or M1/M3 structure, was assessed at minus $3.53/b at the 4:30 pm close of the Platts MOC in Singapore (0830 GMT).

The spread fell 61 cents/b day on day, to lows last seen during the global financial crisis. It was last assessed lower on November 5, 2008, at minus $3.59/b, S&P Global Platts data showed.

May cash Oman's discount to May Dubai futures also lost ground, falling to minus $3.08/b. It had been assessed at minus $2.78/b on Tuesday. The spread now stands just 60 cents/b away from its all-time low of minus $3.68/b on October 10, 2008.

Sellers push on

Wednesday's MOC saw five individual offers for the sale of full-sized May spot cargoes, for both light and medium crude grades.

All the offers stipulated May 1-25 loading dates and B/L Month pricing, mirroring terms that are the norm for cargoes traded in the spot market.

The offers, for Upper Zakum, Das Blend and Murban cargoes, were similar to those seen earlier in the week, when sellers pushed down price levels sharply in the absence of buying interest.

Wednesday's offers moved even lower, but no buyers were to be found.

ExxonMobil offered two cargoes of Upper Zakum, once again providing buyers a choice between purchasing on a Dubai-linked pricing basis or against the Upper Zakum official selling price (OSP).

Meanwhile, Total offered a cargo each of Das Blend and Murban, while BP offered a single May loading Murban cargo.

ExxonMobil's offer priced against the Upper Zakum OSP moved down to stand at parity with the OSP by the end of the MOC, compared with a premium of 10 cents/b on Tuesday.

The seller's Dubai-linked offer moved down to a discount of $2.85/b by the close on Wednesday, compared with minus $2.55/b the day before.

Meanwhile, Total's offer for Murban moved down to a discount of 20 cents/b under the Murban OSP, but was surpassed by BP who placed its offer at a discount of 25 cents/b. Just a day earlier, Total had sold a similar Murban cargo at parity with the OSP to Gunvor.

Total's second offer, for Das Blend crude, also moved to a discount of 20 cents/b under the Das OSP, without any buying interest seen.

Other activity

The MOC also saw four Dubai partials change hands, with Shell as the sole seller to buyers Hengli, Total and Vitol.

The total partials count for the month of March now stands at 148, 137 of which are May Dubai partials and 11 are May Oman.

A total four cargoes have been declared via convergences of Dubai partials to date in March, comprising one Al-Shaheen, one Dubai and two Murban cargoes.

Elsewhere in the spot market, crude traders reported discounts of $3.40/b and $3.60/b to Platts front-month Dubai crude assessments for Qatar Marine and Qatar Land crude trades, respectively.

The deals were part of Qatar Petroleum's monthly tender, which also saw three May loading cargoes of Al-Shaheen crude awarded at an average of a $3.07/b discount to Platts front-month Dubai crude assessments.