Dubai crude futures timespreads dip despite physical market firming

Singapore — Benchmark Dubai crude futures timespreads were lower mid-morning Monday in Asia, even as cash differentials for physical barrels in the Middle East sour crude spot market rose amid improved sentiment.

At 11 am in Singapore (0300 GMT) Monday, the June/July Dubai futures timespread was pegged at minus 12 cents/b, while the July/August spread was pegged at minus 24 cents/b.

In comparison, the June/July timespread was assessed at minus 1 cent/b at the 4:30 pm Singapore close (0830 GMT) Friday after briefly flirting with backwardation on the day, while the July/August spread was assessed at minus 17 cents/b.

While lower on the day, the Dubai futures timespreads have risen from the start of the month, when the June/July spread was assessed at 89 cents/b and the July/August timespread at minus 75 cents/b on May 4, S&P Global Platts data showed.

The prompt Dubai futures spread was last in backwardation on March 5 at 3 cents/b, but has since traded in the negative, falling to as low as minus $4.09/b on April 21, Platts data showed.

Spot trading activity for July-loading cargoes is expected to move into full swing this week following the conclusion of Qatar's monthly spot tender late last week - widely regarded as a curtain opener for spot trading and an indicator of price trends in the Middle East crude market.

Qatar Petroleum for the Sale of Petroleum Products, or QPSPP, awarded two July-loading Al-Shaheen crude cargoes at an average discount of around $2.70/b to Platts front-mont Dubai crude assessments, up from an average discount of $10.40/b heard concluded for June-loading cargoes the previous month.

QPSPP also awarded a July-loading cargo of light sour Qatar Land crude at a discount of $4/b to Platts Dubai, up from minus $9.30/b last month.

Several tenders for Middle East crude cargoes are expected to emerge this week from end-users such as Taiwan's CPC, Formosa Petroleum Corp. and Japan's Fuji Oil, including offers for Russia's ESPO crude oil.