Crude MOC: Sour crude complex resilient despite soft Asian demand

Singapore — Benchmark cash Dubai premium against Dubai futures rose at the Asian close March 22, even as buying interest weakens in the spot market for the sour crude complex.

S&P Global Platts assessed May cash Dubai at a premium of $1.10/b to the same-month Dubai futures at the 4.30pm Singapore close on March 22, up 15 cents/b from close on March. 19.

May cash Oman was assessed at a premium of $1.29/b to same-month Dubai futures, up by 19 cents/b from close on March. 19.

The slight jump comes despite a dull outlook for premiums in the spot market, as trading for the May-loading cycle nears its end and buying requirements for most North Asian refineries are already fulfilled, according to market sources.

"There are not too many cargoes left in the market, but most refineries have already bought what was necessary to buy," said a source at a North Asian refinery.

Adding to the demand woes, the sour crude complex is also facing pressure from arbitrage from the West that is diverting demand away from Middle Eastern crude grades.

"PG grades are not making a lot of sense in India, arbitrage cargoes make more sense," said a refiner based in India.

Initial talks indicate that Taiwan's Formosa procured 1 million barrels of Khafji crude in its most recent tender at an unknown differential to Arab Heavy crude official selling price, but further details were not available at the time of writing.

On March 22, BPSG offered 500,000 barrels of Murban crude in the Platts Market on Close assessment process loading from FOB Fujairah/Jebel Dhanna for May 1-25. BPSG lowered the offer from OSP plus 35 cents/b to OSP plus 33 cents/b at the end of the MOC process but did not attract any buying interest.

The Platts Market on Close assessment process also saw a total of six May Dubai partials of 25,000-barrels and 2 Oman partials traded.

The Dubai partials were traded with Phillips 66, Vitol, Total and Unipec on the sell side and Petrochina and Shell on the buy side.

Total declared a May-loading cargo of Upper Zakum crude to Petrochina following the convergence of 20 partials of cash Dubai.

Both Oman partials were traded with Unipec on the sell side and PetroChina on the buy side.