Dubai futures spreads strengthen amid talk of Saudi allocation cuts

Singapore — Dubai crude futures spreads were higher at noon on June 15 amid talk of allocation cuts made by Saudi Aramco to their customers in Asia, market participants said.

At 12 noon in Singapore on June 15 (0400 GMT), intermonth spreads for Dubai crude futures were trending higher with the July/August Dubai crude futures spread pegged at 2 cents/b, just a cent lower than the 3 cents/b assessed at the 4.30pm (0830 GMT) Singapore close on June 12, S&P Global Platts data showed.

The August/September spread strengthened to minus 24 cents/b at noon on June 15, up from minus 27 cents/b assessed at the Asian close on June 12.

Market participants were reportedly digesting Saudi Aramco's crude allocations for July, which has just been issued to term holders.

Initially, market sources indicated that allocation cuts were given to most refiners, although further details remained unclear as of mid-morning June 15.

Traders have indicated that large cuts to allocation of Saudi barrels could provide further support to the Middle East crude market, which has already strengthened from the previous month.

The expected compliance of the OPEC+ cuts by members including Iraq, Nigeria, Angola and Kazakhstan, coupled with the expected return of demand from refineries across Asia and higher Middle East crude OSPs have all boosted sentiment for the market this month.

Meanwhile, the August Dubai futures was pegged at $37.61/b at noon on June 15, down 0.6% from the 4.30pm Asian close on June 12, in line with lower Brent values.

The Brent/Dubai Exchange of Futures for Swaps spread was steady at 36 cents/b at noon on June 15, unchanged from the Asian close on June 12.