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14 May 2021 | 11:44 UTC — Singapore
By Reetika Porwal and Pankaj Rao
Singapore — Benchmark cash Dubai's premium against Dubai futures rose sharply at the Asian close May 14 while India's struggle to contain the COVID-19 virus is severely limiting its crude import volumes.
S&P Global Platts assessed July cash Dubai at a premium of $1.24/b over the same-month Dubai futures at the 4.30pm Singapore close on May 14, up 41 cents/b from the Asian close on May 12.
July cash Oman was pegged at a premium of $1.39/b over same-month Dubai futures, up 49 cents/b from the previous close.
India kickstarted its crude buying activity this month through a spate of tenders by Indian Oil Corp. along with a tender issued by fellow refiner MRPL.
IOC is seeking 5 million barrels of West African, US or Middle East crude for arrival in July or August. The tender closes May 20 with same-day validity.
Similarly, fellow refiner MRPL issued a tender seeking 650,000 barrels of West African or US crude for arrival in July.
Compared to previous months, import volumes were smaller, indicating the dent in demand caused by the unchecked spread of COVID-19 infections across the country, leading to mobility curbs due to stringent lockdowns.
"Finally tenders are out. Estimated volumes are around 5 million barrels to make up for lost time but not normal quantity [for India]," a trader in Singapore said.
However, the wider market suggests the existing export commitments for products, rather than an improvement in domestic demand, could be the trigger to import more crude.
"IOC tenders are surprising but this could be to keep refinery runs going," a trader with a South Asian refinery said. "They [also] have export commitments so they have to keep them going."
During the Platts Market on Close assessment process, French oil major Total bid a 500,000-barrel cargo of Abu Dhabi's Upper Zakum crude loading July 1-31. Total kept the bid steady at a premium of $1/b over Platts Dubai until the end of the MOC process, without attracting any selling interest.
Total also bid a 500,000-barrel cargo of Al Shaheen crude loading July 1-28. It raised the bid from Platts Dubai plus 80 cents/b to Platts Dubai plus 95 cents/b at the end of the MOC process, without attracting any selling interest.
The MOC process saw 26 July Dubai partials of 25,000 barrels traded.
The Dubai partials were traded with Shell, Unipec, Reliance and Mercuria on the sell side and Total and Glencore on the buy side.