Asia crude oil: Key market indicators for April 18-22

Crude oil prices are expected to be weighed down in the week ending April 22 amid supply disruptions in Libya and the prospect of further reductions in Russian oil supply amid rising Ukraine tensions.

Front-month June ICE Brent crude futures stood at $112.55/b at 0240 GMT April 18, up 85 cent/b from settlement on April 14.

Middle East Crude

** Trading activity for June-loading Middle Eastern crudes are likely to pick up this week following the issuance of spot tenders, as fewer term nominations are expected following ADNOC and Saudi Aramco's allocations for May-loading barrels.

** Asian demand may improve following lower prices seen for light sour crudes, spurring pockets of buying interests from regional refiners.

** Results for Qatar Energy's June loading tender offering Qatar Land, Marine and Al Shaheen crudes as well as Iraq's SOMO's May loading tender offering Basrah Medium and Heavy are expected to emerge this week.

** Market participants also await clarity on trade details for buy tenders from India's IOC and MRPL.

** SOMO raised official selling prices for its May-loading crude bound for Asia where it set May-loading Basrah Medium at a premium of $5.80/b to the average of Platts Oman/Dubai assessments, up from $3.50/b in April, and Basrah Heavy at a premium of $2.80/b, up $2.60/b.

** Dubai cash-futures, or M1-M3, averaged $3.06/b the week ended April 14, against $3.77/b in the week ended April 8.

** Intermonth spreads were wider during mid-morning trade April 18 with June-July pegged at $1.52/b, up 22 cents/b from the Asia April 14 close.

** June Brent-Dubai Exchange of Futures for Swaps was pegged at $6.72/b at mid-morning April 18, up 6 cents/b from the Asia close April 14.

Asia Pacific Crude

** Trading activity for Australian light sweet condensates will likely be steady this week amid slight uptick in sentiment, although cash differentials are still in negative territory, bogged down by weak naphtha and petrochemical margins.

** Across the light sweet crude complex, clarity on trade details for May-loading barrels of Ichthys Field Condensate and Kutubu Blend are expected to emerge this week.

** Regional sweet crudes traders will be looking out for spot trades of June-loading barrels of Malaysia's Kimanis and Labuan crudes, as well as tender results on a slew of Vietnamese crudes offered by PetroVietnam Oil.

** Cash differentials for May-loading barrels of heavy sweet crude Dar blend has fallen from the highs of previous month with LSFO cracks falling from a multi-year high in March.

** Traders are also waiting for Brunei's February OSP this week.

Delivered Crude

** Arbitrage flow of US WTI Midland crude into Asia remains sparse with market participants waiting for fresh pricing cues amid weak China demand.

** Sentiment for July delivery cargoes of Brazil's Tupi crude into Asia will likely be sluggish this week with China's lockdown hurting demand amid a weakening market structure.

Futures

** Oil prices are expected to climb in the week ended April 22 amid supply disruptions in Libya and the prospect of further reductions in Russian oil supply.

** Libya's National Oil Corp. said April 17 that it declared force majeure on deliveries of Mellitah crude oil exports after the 70,000 b/d El Feel, or Elephant, oil field was closed.

** Existing EU sanctions are expected to further crimp purchases of Russian oil and gas next month, as traders shy away from deals due to ambiguous wording and growing unease over sourcing Russian commodities.

** In the week ended April 14, the international crude oil benchmarks were higher with the June contract for ICE Brent futures up 8.7% on the week to settle at $111.70/b, while the May contract for NYMEX light sweet crude was 8.8% higher at $106.95/b.