Dubai crude futures steady ahead of Sep OSP releases

New York — The sour crude market kicked off the month on a steady note as participants awaited the release of fresh official selling prices from Middle Eastern producers in coming days for further cues, while intermonth spreads were rangebound in mid-morning trade August 3.

At 11 am Singapore time (0300 GMT), the September/October Dubai crude futures spread was pegged at a contango of 22 cents/b, narrowing 3 cents/b from the Asia close on July 30, S&P Global Platts data showed.

Meanwhile, the October Brent-Dubai Exchange Futures for Swaps spread was pegged at 34 cents/b, widening 3 cents/b from the Asia close on July 30.

The new front-month October Dubai futures contract was pegged at $42.93/b at 0300 GMT August 3. The front-month September contract was assessed higher at $43.15/b at the Asia close July 30.

On the supply front, concerns were increasing that a rebound in global production as OPEC+ pulls back from unprecedented production cuts in August and US production returns will further weaken supply-demand fundamentals.

Market participants said both Aramco and ADNOC were expected to lower their OSP differentials for Asia-bound crude oil cargoes loading in September. The lighter crude grades could see more support owing to slight improvements in light product cracks, market participants surveyed said.

The expected decrease comes amid bearish market fundamentals and a weaker crude structure in recent days.

The Dubai cash-futures spread averaged at a premium of 74 cents/b in July, after averaging at a premium of 84 cents/b in June, Platts data showed. The spread stood at a discount of 5 cents/b at the Asia close July 30.