Dubai futures spreads rangebound as sentiment steadies

Singapore — Steady sentiment in the physical Middle East sour crude market has kept the Dubai intermonth crude futures spreads largely balanced during mid-morning trade in Asia June 24.

The prompt July/August Dubai crude futures spread was pegged at a backwardation of 18 cents/b at 11 am (0300 GMT) in Singapore on June 24, slightly higher than the 16 cents/b assessed at the 4:30 pm (0830GMT) Asian close in Singapore on June 23, S&P Global Platts data showed.

The August/September spread, meanwhile, was pegged lower at minus 2 cents/b mid-morning June 24, after being assessed at parity at the Asian close on June 23.

The spreads were rangebound on June 24 after retracting from a one-month high on June 19, S&P Global Platts data showed.

Market participants have indicated that cash differentials of Middle East sour crude barrels have eased in recent days as spot cargoes are still available in the market, while demand from Asian refiners have dissipated following the fulfillment of core requirements last week.

Reflecting this sentiment, two 500,000-barrel cargoes of Abu Dhabi's Upper Zakum crude were offered by Singapore-based EXTAP, or ExxonMobil Trading Asia Pacific, on the Platts Market on Close assessment process on June 23.

The offers for the cargoes, which load over August 1-25, and comes with bill of lading price terms, stood at the close of the Platts MOC assessment process at a discount of 10 cents/b to Upper Zakum's August official selling price and a premium of $1.55/b to front-month cash Dubai in August, respectively, without attracting any buying interest.

Prior to this, August-loading Upper Zakum crude cargoes were reportedly purchased by Taiwan's CPC, via a tender last week, at premiums of around 25 cents/b to the grade's OSP.

The August Dubai futures stood at $41.54/b in the morning of June 24, down 2.3% from the Asian close on June 23, while the August Brent/Dubai Exchange of Futures for Swaps was pegged at 81 cents/b June 24, 16 cents/b narrower than the 97 cents/b assessed at the June 23 Asian close.