ASIA CRUDE OIL: Key market indicators for July 25-29

Oil prices are expected to face headwinds from weakening economic activity in the West and rising COVID-19 cases in the July 25-29 trading week, with investor attention to be focused on the US FOMC meeting over July 26-27.

Front-month September ICE Brent crude futures stood at $102.44/b at 0230 GMT July 25, down 76 cents/b (0.74%) from the July 22 settlement.

Middle East crude

** Trade activity for September-loading crude is expected to ease amid expectations of Asian buyers likely having completed their purchasing requirements this month.

** Eyes will be on increased flows of US WTI Midland crude, which could further pressure prices for Murban.

** Discussions on official selling prices for September will commence with another round of increases widely expected given the jump in the Middle East sour crude complex this month.

** Dubai cash/futures (M1/M3) averaged $9.60/b in the week ending July 22, against $9.34/b the week before.

** Intermonth spreads were narrower in mid-morning trade July 25, with September/October pegged at $2.75/b, down 7 cents/b from the Asia close July 22.

** September Brent/Dubai Exchange of Futures for Swaps was pegged at $10.52/b mid-morning July 25, down 6 cents/b from the Asia close July 22.

Asia-Pacific crude

** Trading activity for September-loading barrels of Australia's North West Shelf condensate will be closely watched this week amid expectations that cash differentials could be capped as naphtha cracks remains lukewarm.

** Cash premiums for light sweet crudes including Australia's Ichthys Field Condensate could be supported amid healthy middle distillate product cracks, however tepid gasoline cracks could limit the potential upside.

** For regional medium sweet crudes, market participants will look out for further spot trades across the Malaysia's MCO crude basket following record levels seen for September-loading barrels of Labuan and Chim Sao crudes.

** More details on September-loading barrels of regional heavy sweet crudes are expected to emerge this week.

** The issuance of Brunei June official selling prices was expected this week.

Delivered crude

** More volumes of WTI Midland could flow to Asia as differentials fall on the back of an SPR release and a wider NYMEX WTI/Brent spread.

** Spot differentials for Asia-delivered barrels of Brazilian crudes could find support amid pockets of demand in South Korea.

Crude futures

** COVID-19 concerns were weighing on sentiment amid a winter omicron wave in Australia and mounting COVID-19 cases in China.

** Preliminary PMI data released late last week showed economic activity in the US and Eurozone falling sharply into contraction in June, in a sign that soaring energy prices and spillover effects from the Ukraine war were taking an increasingly heavy toll.

** The September contract for ICE Brent crude futures rose 2% week on week to settle at $103.20/b July 22, while the September contract for NYMEX light sweet crude edged up 0.1% to $94.70/b.