CRUDE MOC: Murban, Dubai declared in MOC convergences Wednesday

Singapore — A cargo each of Murban and Dubai were declared for two convergences of Dubai partials in the Platts Market on Close assessment process for Middle East sour crude Wednesday.

Seller BP declared both cargoes, after trading 20 partials each with buyers Lukoil and Total. BP declared the cargo of Murban to Total on the 20th partial traded at a price of $16.90/b. It declared the Dubai cargo to Lukoil on the 20th trade executed at an outright price of $16.95/b.

These are the third and fourth convergences for the month to date. Previously, two cargoes of Murban have been declared in the MOC, one each on convergences of Dubai and Oman partials. Altogether three Murban cargoes and one Dubai cargo have been declared for June convergences in the crude MOC this month.

Meanwhile, a total 192 June partials have traded in the MOC over April so far, 154 of these being Dubai and 38 Oman.

Additionally, a full-sized 500,000 barrel cargo of Upper Zakum was also traded in the MOC earlier in April, when Total bought an offer placed by ExxonMobil on April 23. The trade was priced at a premium of 30 cents/b over the June Upper Zakum official selling price (OSP).

Each partial is 25,000 barrels in size. A convergence occurs when 20 partials are traded between two counterparties, resulting in a full 500,000 barrel physical cargo being declared from the seller to the buyer.

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.

The quality premium for June loading Murban declared in the MOC was set at 63.76 cents/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 the 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.

Murban, one 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.