CRUDE MOC: Platts June cash Dubai crude closes at $20.70/b, averages $20.387/b in Apr

Singapore — The S&P Global Platts cash assessment for June-loading Dubai crude oil cargoes settled at $20.70/b Thursday and averaged $20.387/b over April.

The June cash assessment for Oman crude settled at $21.25/b Thursday, taking the average for April to $20.482/b.

The average for front-month cash Dubai in April is 39.5% lower than in March, when the contract averaged $33.70/b.

Similarly, the front-month Oman cash contract averaged $34.01/b over March, or 39.8% higher than in April.

This is the second consecutive month of deep slides in global oil prices, with the average of front-month ICE Brent futures contract down by 23.6% for the month. The June ICE Brent futures contract was assessed at $24.28/b at 4:30 pm in Singapore (0830 GMT) at the close of the month, averaging $26.45/b for April. Comparatively, the contract averaged $34.62/b at the 0830 GMT Asian close over March.

Meanwhile, June cash Dubai's discount to the Oman assessment averaged 9.5 cents/b in April, narrowing from 31 cents/b in March, Platts data showed.

Most notably, the Dubai cash/futures spread -- closely tracked by Middle East crude traders for cues about spot market sentiment -- fell to an average of minus $9.15/b over April. This is down from an average of minus $3.11/b over March.

April MOC recap

Thursday's Platts Market on Close assessment process for Middle East sour crude saw a total of 88 partials change hands, of which 76 were Dubai and 12 were Oman partials. Two convergences were seen for Dubai partials trades, and one for Oman.

A June Murban cargo was declared for the convergence on Oman partials, by Unipec to buyer Total. Meanwhile, two cargoes of June Al-Shaheen were declared on convergences of Dubai partials, by sellers Unipec and Shell to Total as the sole buyer.

A total 280 partials -- equal to 7 million barrels of crude -- were traded in the Platts MOC over April, of which 230 were for Dubai and 50 for Oman. Of these, seven convergences were seen, comprising one Dubai cargo, two Al-Shaheen cargoes and four Murban cargoes.

Additionally, a full sized cargo of June loading Upper Zakum also traded in the MOC in April. This was an offer made by Exxon, which was purchased by Total on April 23. The 500,000 barrel cargo was priced at a premium of 30 cents/b to the June Upper Zakum official selling price (OSP).

Full-sized cargoes are typically 500,000 barrels per bid, offer and trade, whereas partials are sized in clips of 25,000 barrels each.

Under the partials trading mechanism, the seller declares a full 500,000 barrel cargo to the buyer after 20 partials have been traded for the same loading month between the two companies.

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 an Oman cargo, or a Murban cargo with a quality premium, to the buyer.

Changes to quality premium

The Quality Premium for June-loading Murban crude oil is $0.6376/b, and will be effective for trade in June-loading cargoes during the MOC through April.

Since April 1, S&P Global Platts has raised the minimum threshold to 50 cents/b from 25 cents/b for the Murban quality premium that sellers receive for the nomination and delivery of a cargo of Murban crude oil into a physical convergence of Dubai, Al Shaheen, Upper Zakum or Oman partials during the MOC.

The Murban quality premium is set at 60% of the net price difference between Platts front-month cash Murban assessment and Platts front-month cash Oman assessment during the full month prior to announcement.

The higher minimum threshold will mean that a QP of $0.00/b will be announced if 60% of the observed price difference between the Platts Murban and Oman assessments during the prior month is less than 50 cents/b.

The change follows an unprecedented narrowing of the relative value of Murban compared with other grades in the Oman and Dubai baskets.

Platts announces the Murban QP on the first publishing day of each month, two months prior to the QP coming into effect. As an example, Platts would announce Murban QP on the first business day of April, for cargoes loading in June. This calendar aligns with typical trading practices, where June cargoes are primarily traded in the month of April.