Dubai futures steady as June Middle East crude trading winds down

Singapore — Benchmark Dubai crude futures were steady during mid-morning trade in Asia on Monday, as activity for the June spot cycle was winding down, traders said.

At 11 am in Singapore (0300 GMT), the June Dubai futures contract was pegged at $26.30/b, up 6 cents/b from its assessment of $26.24/b at Friday's close in Asia.

The intermonth Dubai crude futures ticked upward Monday morning, but were largely steady compared with Friday.

The May/June Dubai futures spread was pegged at minus $2.88/b at 0300 GMT Monday, up 8 cents/b from minus $2.96/b assessed on Friday at 4:30 pm in Singapore (0830 GMT). The June/July spread climbed at a similar pace, rising 11 cents/b from Friday's assessment to be pegged at minus $1.27/b Monday morning.

Activity in the physical market was slow to kick off Monday morning, according to Middle East crude sources in Asia.

Market participants were expecting results from a few outstanding tenders for June cargoes, but deals were largely concluded or deferred to the next cycle, they said.

Russian seller Rosneft's tender offering several June loading cargoes was expected to have been awarded late Friday, but results were not available in the wider market, market sources told S&P Global Platts Monday.

Meanwhile, some buyers failed to award tenders for June Middle East crude last week, as offers climbed unexpectedly, and buyers unwilling to pay the revised market rates for these cargoes.

The deep contango structure is partially responsible for prices rising toward the end of the month, crude traders said.

Sellers will have more impetus to move cargoes into storage as the close of the June cycle approaches, they added.

Additionally, product margins for the lighter end of the barrel recorded slight increases from a week ago, which may have led prices for those grades to rise, traders said.

The crack spread for Singapore naphtha against Dubai paper rose 17.6% in the week ended April 24, to minus $8.80/b, compared with minus $10.68/b in the prior week, Platts data showed.

Similarly, the spread between FOB Singapore 92 RON to Dubai futures ticked 7.7% higher week on week, to minus $4.69/b, according to the data.

The remaining set of product cracks declined on a week-on-week basis, however, and this included middle distillate margins for jet and gasoil.