CRUDE MOC: First Murban cargo convergence declared on Oman partials since 2018

Singapore — A cargo of Murban crude was declared on a convergence of Oman partials on the Platts Market on Close assessment process Friday, the first such declaration on a convergence of Oman partials since 2018.

Seller Unipec declared the June loading clip of Murban to buyer Total, when the number of June Oman partials that changed hands between the two touched 20 during Friday's MOC. The 20th partial was Total buying an offer by Unipec priced at $20.80/b.

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

The quality premium for June loading Murban declared in the MOC was set at $0.6376/b, and is payable by the buyer to the seller upon declaration.

Effective April 1, 2020, S&P Global Platts has raised the minimum threshold for the quality premium to 50 cents/b from 25 cents/b, which is set at 60% of the net price difference between Platts front-month cash Murban assessment and Platts front-month cash Oman assessment during the full month before the announcement.

The higher minimum threshold will mean that a QP of zero will be announced if 60% of the observed price difference between the Platts Murban and Oman assessments during the previous month is less than 50 cents/b.

This is the first convergence of the month for either Dubai or Oman partials, 83 of which have traded so far in April.

It is also the first time in 16 months that a buyer of Oman partials has received a cargo of Murban crude from the seller. This occurred on December 6, 2018, when again Unipec declared a Murban cargo on a convergence of Oman partials in the MOC. BP was the recipient of the convergence cargo then.

Murban, which is part of the basket of five grades deliverable into Dubai partials, is also deliverable into Oman, Al-Shaheen and Upper Zakum partials that are tradeable on the Platts Crude MOC in Asia. It was declared for the first time ever on any grade in the MOC in August 2018, when Total as the seller declared the grade to Shell, on the completion of 20 Oman partial trades.

Since then, Murban has on occasion also been declared on convergences of Dubai partials in the MOC.

In recent weeks, the spot price of the typically premium light sour grade has slid dramatically, in line with prices for the refined products it has the highest yields for: namely, naphtha, gasoline and distillate fuels.

June loading cargoes of the crude are currently trading at discounts of around $2/b to its official selling price, market participants said.

In Friday's MOC there was also an offer for a full 500,000 barrel clip of Upper Zakum crude placed by seller ExxonMobil in the MOC. Exxon's offer was priced at a premium of 5 cents/b to the June Upper Zakum OSP. The offer met with no buying interest and remained at that price at the 4:30 pm close of the MOC in Singapore (0830 GMT).