Intermonth spreads for Dubai crude futures mixed in thin trade

New York — Dubai crude futures intermonth spreads were mixed at noon in Asia on June 25 as trading activity in the Middle East sour crude market thins towards the end of the trading cycle.

The prompt July/August Dubai crude futures spread was pegged at 25 cents/b backwardation at 12 pm in Singapore (0400 GMT) on June 25, up 2 cents/b from 23 cents/b assessed at the 4:30 pm close (0830 GMT) the day before, S&P Global Platts data showed.

The August/September spread, which had flipped into backwardation on June 19, has dipped into a mild contango of 2 cents/b as of noon June 25, down from the 2 cent/b premium assessed at the Asian close the day before.

Trading activity on the Middle East crude market has eased following the bulk of purchases last week, with cash differentials on a similar downtrend.

However, market participants noted that marginal demand for Middle East sour crude barrels could re-emerge if the price was right.

"I think it depends on [the] different [sour crude] grades. If [a] crude [cargo] becomes distressed [and offered at a lower price], maybe buyers will come out," a North Asian crude trader said.

During the Asian Platts Market on Close assessment process on June 24, a 500,000-barrel cargo of Abu Dhabi's Upper Zakum crude was seen changing hands between trading house Mitsui and Singapore-based ExxonMobil Trading Asia Pacific or EXTAP. The cargo, which was offered by EXTAP for loading over August 1-25, was sold at a premium of $1.20/b to Platts front-month cash Dubai assessments in August.

Some market participants noted that sellers may not be keen to lower prices further for the moment and may wait for the next trading cycle to begin before selling their remaining barrels.

Reflecting weaker sentiment in the global market, August Dubai futures were also lower at $39.51/b at noon June 25, down 4.7% from the Asian close the day before.

Dubai's spread to ICE Brent futures, or the Brent/Dubai Exchange Futures for Swaps, narrowed to be pegged at 61 cents/b at noon June 25, down 13 cents/b from the 74 cents/b assessed at the Asian close the day before.