CRUDE MOC: Cash Dubai at over 18-year low as oil demand revised down sharply

Singapore — Middle East sour crude benchmark cash Dubai fell to its lowest price in over 18 years due to a global fall back in oil prices on fresh downward revisions to oil demand for April.

June cash Dubai was assessed at $19.64/b Wednesday at the end of the Platts Market on Close assessment process in Asia, touching lows last hit in 2002.

Platts' front month cash Dubai assessment was previously assessed lower on February 27, 2002, at $19.57/b.

The Middle East crude benchmark traced a global fall in oil markets, after the International Energy Agency forecast global oil demand in April would sink to 1995 levels.

The agency expects global demand in April to be 29 million b/d lower than a year earlier. It said that May's demand would be down 26 million b/d year on year, with a gradual recovery the following month leaving June down 15 million b/d.

The IEA report, published three days after OPEC+ agreed that from May output would be cut by 9.7 million b/d, said that "there is no feasible agreement that could cut supply by enough to offset such near-term demand losses."

June trading picks up

Despite low demand forecasts weighing on sentiment, activity for the June trading cycle picked up Wednesday in the MOC, shortly after Abu Dhabi National Oil Company released fresh official selling prices for its crude grades.

ADNOC's Murban, Das, Upper Zakum and Umm Lulu grades are fungible grades traded in the physical crude market in Asia, whilst those exported by Saudi Aramco are restricted from being traded freely on the open market.

Oil refiner ExxonMobil placed an offer for a June loading cargo of ADNOC's Upper Zakum crude on the MOC Wednesday. Exxon offered a 500,000-barrel clip of the medium sour crude over a loading period of June 1-25 and with B/L Month pricing terms. Its offer was priced against the June Upper Zakum OSP, which has not been released yet.

Exxon's final offer for the cargo stood at a premium of 25 cents/b against the OSP, without meeting with any buying interest.

"It's a start, first day of OSPs and they are out offering," a trader said.

June trading has been delayed nearly two weeks this month because of OPEC+ production cut discussions, which held producers back from issuing official selling prices up until this week.

In Wednesday's MOC there were also 11 partial trades, six for Dubai and five for Oman. This brings the total count to 50 partials traded in April to date, of which 39 are Dubai and 11 are Oman partials.

Each partial is 25,000 barrels in size. A convergence occurs when 20 partials are traded between two counterparties, resulting in a full, 500,000-barrel physical cargo being declared from the seller to the buyer.

For Dubai partials, the seller has the option to deliver a Dubai, Oman, Upper Zakum, Al-Shaheen or, with a quality premium, Murban cargo to the buyer.

For Oman partials, the seller has the option to deliver Oman, or, with a quality premium, a Murban cargo to the buyer.