CRUDE MOC: ESPO, Murban crudes at record lows amid OPEC+ impasse

Singapore — Light crude grades such as Russia's ESPO Blend and UAE's Murban dropped to record lows Monday amid fast-fading optimism on the OPEC+ alliance's ability to strike a conciliatory tone for a sizable production cut agreement.

June loading ESPO was assessed at a discount of $2/b under the Platts front-month Dubai crude assessments on Monday, its lowest on record since S&P Global Platts began publishing the M1 differential in January 2010, data showed.

Meanwhile, June cash Murban's differential slid to minus $8.77/b against June Dubai futures on Monday, the grade's lowest mark since Platts began publishing the differential to Dubai in July 2018.

Both ESPO and Murban are typically considered premium crudes in the Asia market, fetching higher yields of gasoline, naphtha and diesel.

But severe loss of demand and oversupply has left the Asian crude market with an overhang of unsold ESPO and Murban cargoes from the April and May loading cycles, market sources said.

"The market is still flooded [with unsold cargoes] here," said a Singapore-based trader, in addition to having "severe run cuts" at refineries.

"Lockdowns due to the coronavirus are impacting the demand for products," he added.

Additional uncertainty regarding official selling prices for Middle East sour crude grades was also being priced in by the market, sources added. Prices issued from Middle East producers such as UAE's Abu Dhabi National Oil Company and Saudi Aramco have been delayed to the latter half of the week in lieu of an OPEC+ meeting set for Thursday, industry sources told Platts.

But market participants in the Middle East sour crude market questioned whether the producer group will be able to set aside their differences long enough to reinstate sizable production cuts to bring oil markets back to equilibrium, they told Platts on Monday.

"I wonder if OPEC+ can really make a deal," commented a trader.

The alliance will debate via webinar over a multitude of market issues ranging from bulging production and plunging oil prices, with Middle East producers postponing official selling price decisions till after the meeting.