Crude MOC: Cash Dubai inches up as market eyes spot trade amid bleak demand cues

Benchmark cash Dubai crude's premium to Dubai futures inched up at the 4:30 pm Singapore close Aug. 12, although market participants awaited the commencement of spot trade for October-loading cargoes amid bearish demand cues from Asian buyers.

S&P Global Platts assessed October cash Dubai at a premium of $2.25/b to the same-month Dubai futures at the 4:30 pm Singapore close Aug. 12, up 8 cents/b from the previous day.

October cash Oman was assessed at a premium of $2.39/b to same-month Dubai futures, also up 8 cents/b from the previous day.

China's capped crude import and product export quotas along with fresh outbreaks of COVID-19 will reduce purchase volumes from the country, sources said.

Government measures might be able to reduce the spread of the virus but the tough restrictions will impact product consumption in the country, a crude oil trader in Singapore said.

Demand for medium and heavy grades is expected to remain weak while refinery downtime in Japan could also slow imports for lighter crude grades, sources said.

During the Platts Market on Close assessment process, Hengli offered a 500,000 barrel cargo of Abu Dhabi's Upper Zakum crude for loading in October.

Hengli lowered the offer to Platts Dubai plus $2.25/b from Platts Dubai plus $2.35/b at the end of the MOC process without attracting any demand.

The Aug. 12 MOC saw 20 October Dubai partials of 25,000 barrels traded.

The Dubai partials were traded with Reliance, PetroChina, Koch, Equinor, Exxonmobil, Mitsui and Glencore on the sell side and BP, Gunvor, TotalEnergies and Shell on the buy side.

PetroChina declared a cargo of October loading Upper Zakum crude to TotalEnergies following the convergence of 20 partials in Platts cash Dubai.

This was the first convergence declared in August so far.

A convergence occurs when 20 partials are traded between two counterparties, resulting in a full, 500,000 barrel physical cargo being declared from the seller to the buyer.