CRUDE MOC: Dubai spread rebounds to month high from record lows

Singapore — Benchmark cash Dubai's discount to futures climbed to its highest level this month Tuesday, barely two weeks after sinking to its lowest level ever recorded, Platts data showed at the end of the Market on Close assessment process in Asia.

The June Dubai cash/futures spread ticked up to be assessed at minus $7.46/b Tuesday, up 15 cents/b day on day. The spread was around 31% above its lowest level, which it sank to earlier this month on April 16, at minus $10.88/b.

The spread -- also referred to as the M1/M3 structure -- closely reflects the state of the Middle East sour crude market in Asia.

The spread sank to deep lows this month amid a collapse in oil demand as refineries across Asia cut run rates, while Middle East producers tried to reach a contentious production cut agreement to drain excess supplies off the market.

A 9.7 million b/d production cut agreement did little to assuage the market in the week of April 16, as demand destruction for April was estimated to be around 29 million b/d, outstripping any considerable benefits from supply cuts.

Sentiment has edged upward since, however, as refining demand from China lights a small spark of optimism in the Asian crude market. On the flipside, news of producers from the OPEC+ alliance taking measures to cut production over May and June has also boosted market levels.

Meanwhile, the Platts MOC for Middle East sour crude saw nine partials change hands on Tuesday, bringing the month's total count to 160, with 126 Dubai and 34 Oman.

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.