CRUDE MOC: Middle East crude at 21-year lows as storage fills up

Singapore — Middle East crude hit lows last seen in 1999 at the end of the Platts Market on Close assessment process in Asia on Wednesday, as the oil market collapse raged on amid shrinking global storage options for crude and refined products.

June cash Dubai was assessed at $13.55/b Wednesday at 4:30 pm in Singapore (0830 GMT). That was the lowest level since March 25, 1999, when Dubai crude was assessed at $13.30/b.

Tank operators said the cost of storing crude oil as well as refined products in Singapore has risen on the back of a deluge of inquiries by traders due to the demand destruction brought about by the coronavirus pandemic.

Other Middle East crudes linked to regional benchmarks Dubai and Oman also fell, to levels ranging from $11.55/b for May-loading Basrah Heavy crude to $14.19/b for a June cargo of Murban crude.

The collapse in flat prices was reflective of global crude prices, not least May NYMEX WTI crude futures trading as low as minus $40/b ahead of the contract's expiry on Tuesday and June WTI futures falling around 50% over the same timeframe.

Indeed, with storage capacity running out, many physical crude oil prices in the US were at negative values, meaning further pressure on benchmark WTI crude prices was likely. June WTI futures fell 51% to $10.01/b Tuesday, as the new front-month contract.

WTI is the most commonly used reference marker for US crude. Although it is considered a premium crude by quality compared with European marker Brent and Middle East and Asian markers Dubai and Oman, the US benchmark has traded at discounts to all other global reference crudes for several years due to surging domestic crude production.

The June contract was assessed at $11.24/b at 4:30 pm in Singapore (0830 GMT) Wednesday.

In the same vein, June ICE Brent futures were assessed at $17.47/b, the lowest on record for the front-month contract's Asian close. Platts began publishing the ICE Brent futures price at the 0830 GMT Asian close in July 2007.