Crude MOC: Dubai steady; Oman weakens amid demand concerns

Singapore — Benchmark cash Dubai premium against Dubai futures was steady at the Asian close March 23, amid a slowing pace of spot activity for Middle East crude as Asian demand gets diverted to alternate grades or is already met for May-loading barrels.

S&P Global Platts assessed May cash Dubai at a premium of $1.115/b to the same-month Dubai futures at the 4.30pm Singapore close on March 23, inching up 1.5 cents/b from close on March 22.

May cash Oman was assessed at a premium of $1.16/b to same-month Dubai futures, down by 13 cents/b from close on March 22.

Initial talks indicated that India's MRPL has purchased Brazil's Tupi crude in its most recent tender at a small premium to Dated Brent, CFR, for May delivery, instead of sour crude grades from the Middle East.

The outcome of the tender was surprising, as Tupi does not typically flow into India, sources said.

"Due to lesser Chinese buying, it might have made sense to them," said a trader at an Indian refinery.

Chinese buying patterns have changed as their demand is getting diverted to cheaper alternatives, such as West African and Iranian crudes.

This trend is likely to persist, as an overhang of West African crudes remains and the narrowing Brent/Dubai EFS increases the attractiveness of Brent-linked arbitrage grades, said a source with a North Asian refinery.

The May Brent/Dubai EFS was assessed at $1.96/b at the 4.30pm Singapore close on March 23, lower by 22 cents/b from the Asian close on March 22, S&P Global Platts data showed.

As one of the key Asian buyers of sour crude, changes in their importing patterns is having ripple effects across the sour crude complex.

Furthermore, spot trading activities for sour crudes is also slowing as refineries in North Asia have mostly met their demand requirements, resulting in a lack of keen buying interest, according to market sources.

The Platts Market on Close assessment process also saw a total of 13 May Dubai partials of 25,000-barrels and 2 Oman partials traded.

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

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