DUBAI FUTURES: July EFS below $3/b; ESPO trades clock high premiums

Singapore — Front-month Brent/Dubai Exchange of Futures for Swaps narrowed mid-morning on May 19, sliding below the $3/b mark while strong spot buying continues, with Russian ESPO blend trading at multi-month high premiums.

The July Brent/Dubai EFS was pegged at $2.89/b at 11am (0300GMT) in Singapore on May 19, down 19 cents/b from the Asian close on May 18, S&P Global Platts data showed.

The Brent/Dubai EFS is a key indicator of the spread between light, sweet and heavy, sour crudes, and a narrower EFS makes crude priced against Dubai less economically attractive for Asian refiners compared to Brent-linked ones.

Russia's Surgutneftegaz sold, via a second tender, three 700,000 barrels of July-loading ESPO crude at premiums of around $3.25/b-$3.50/b to Platts front-month Dubai crude assessments. Two cargoes were heard to be sold to Mercuria but the same could not be immediately confirmed.

Premiums for ESPO blend were highest since December 2020 when they traded at $3.2/b-$3.3/b to Platts front-month Dubai crude assessments, Platts data showed.

Surgutneftegaz issued another tender offering 3 more cargoes of July-loading ESPO crude. The tender closes May 19.

Rise in demand for ESPO crude is likely driven by increased crude imports by Chinese refiners on the back of consumption taxes imposed on light cycle oil and mixed aromatics, traders said.

At mid-morning in Singapore, the July/August Dubai time spread was pegged at 49 cents/b, down 5 cents/b from close on May 18, the data showed.

Meanwhile, the August/September Dubai time spread was pegged at 46 cents/b, down 4 cents/b from May 18.