Asia crude oil: Key market indicators for June 21-25

Trade activity in the Asian crude oil market is likely to ease in the week of June 21-25 after a flurry of activity in the week ended June 18 demonstrated healthy demand and well-supported spot trading levels for both sweet and sour crude grades.

August ICE Brent crude futures were pegged at $74.19/b at 0300 GMT June 21, $1.37/b higher from the 0830 GMT Asian close on June 18.

MIDDLE EAST CRUDE

** Spot trade activity for August-loading barrels is likely to ease in the week ahead, with most buyers having fulfilled their purchase requirements.

** Eyes will be on the results of CPC Taiwan's monthly tender seeking 1 million-2 million barrels of Middle East sour crude for loading in August. The tender closes June 17, with validity until June 21.

** Market participants will also keep an eye out for fresh ESPO blend tenders this week. Russia's Surgutneftegaz issued three tenders in the prior week, which were all awarded at premiums of around $3.50-$3.70/b, market sources said, reflecting strong and steady demand for the grade.

** Market will also focus on China's issuance of a second batch of crude import quotas to refineries, which is expected by end June. Participants suggested the possibility of a reduction in crude quotas for independent refineries, which could weigh on crude import demand in the months ahead.

** Dubai cash-futures (M1-M3) averaged $2.09/b in the week ended June 18, against $1.81/b in the week ended June 11. On June 15, front month cash Dubai was assessed at a premium of $2.21/b to Dubai futures, the highest since January 20, 2020 when it was assessed at a premium of $2.22/b.

** Intermonth spreads were higher during mid-morning trade June 21 with August-September pegged at 81 cents/b, up 5 cents/b from the Asian close on June 18.

** August Brent-Dubai Exchange of Futures for Swaps was pegged at $3.88/b mid-morning June 21, down 3 cents/b from the Asian close on June 18. Front month EFS was assessed at $3.91/b on June 18, the highest since Sept. 18, 2019, when it was assessed at $3.93/b.

ASIA-PACIFIC CRUDE

** Market participants will be looking out for trading activity on Australia's North West Shelf condensate and potential demand from key buyer Indonesia's Pertamina this week, amid rangebound naphtha crack spreads.

** Traders are looking to ascertain the tender results for August-loading Qatari DFC and LSC condensates amid a widening Brent-Dubai EFS and stronger demand from Northeast Asian refineries post maintenance season.

** Spot market trades for Australia's Cossack and Ichthys condensate, as well as Papua New Guinea's Kutubu Blend remain in focus this week.

** Trading activity for Far East Russia's Sakhalin Blend is also expected to kick off this week as cash premiums are expected to remain resilient amid wider Brent-Dubai EFS on the month.

** Traders will be watching for the August loading program of Malaysia's Miri, Kikeh and Labuan crudes in the MCO basket, as well as tender results on ConocoPhillips' Kimanis cargo for August loading.

** Traders await clarity on PV Oil's tender results for the two August-loading Su Tu Den crude cargoes following Vietnamese crude tenders awarded at higher cash premiums.

** Trading activity for August-loading Vincent, Pyrenees and Van Gogh crudes are expected to emerge amid recovering marine fuel oil cracks.

DELIVERED CRUDE

** Traders will be looking out for the results of Taiwan's CPC September delivery sweet crude. Cash premiums for US' WTI Midland crude, a key favorite among Asian refiners, could tick higher with emerging demand from Asian refiners.

** After cash premiums for delivered Brazilian Tupi crude surged on stronger Chinese procurement, market participants seen evaluating whether Chinese buying sentiment for the crude can be sustained this week following robust demand from US and European markets.

CRUDE FUTURES

** Analysts said the futures market will remain supported by ongoing recovery in global oil demand. With rising vaccination rates, and easing mobility restrictions, the US and Europe are at the forefront of this recovery, with record crude throughput for May released by China's National Bureau of Statistics on June 16 also indicating strong refinery demand.

** The market will also be closely eyeing the negotiations over the Joint Comprehensive Plan of Action, which resumed in Vienna on June 20, after the election of Ebrahim Raisi as Iran's president. He said earlier that he is committed to the JCPOA.