Asia crude oil: Key market indicators for Aug 16-20

Crude oil futures were lower in mid-morning trade in Asia Aug. 16 as investor concerns over the fast-spreading delta variant resurfaced amid restrictive movement curbs in oil consuming giant China and a growing number of cases in the US.

ICE October Brent crude futures stood at $69.72/b at 0230 GMT Aug. 16, down $1.11/b from the 0830 GMT Asia close Aug. 13.

Middle East crude

** Activity in the Middle East crude market could pick up this week with the release of more October loading spot tenders.

** Qatar Petroleum has issued a tender offering two 500,000-barrel cargoes of Al-Shaheen crude and one 500,000-barrel cargo of Qatar Land crude for loading in October that closes Aug. 16 with next-day validity.

** Russia's Surgutneftegaz's three 700,000-barrel cargoes of ESPO Blend crude offered via tender for loading in October were heard sold at premiums of around $1.90-$2/b to Platts front-month Dubai crude assessments.

** The result of Iraq's SOMO tender offering 2 million barrels of September-loading Basrah Medium crude that closed Aug. 12 is awaited.

** Dubai cash/futures (M1/M3) averaged $2.26/b in the week ended Aug. 13 and $2.38/b in the week ended Aug. 6.

** The October/November intermonth spread was pegged at 67 cents/b in mid-morning trade Aug. 16, up 4 cents/b from the Asia close Aug. 13.

** The October Brent/Dubai Exchange of Futures for Swaps was pegged at $3.01/b, down 13 cents/b over the same period.

Asia-Pacific crude

** Market participants early Aug. 16 were awaiting the release of Indonesia's TPPI condensate tender to absorb unsold arbitrage barrels, as well as movement in October loading NWS cargoes.

** QPSPP's October loading spot LSC and October-March loading term LSC tenders were expected, and cash premiums could dip lower amid a narrower Brent/Dubai EFS spread and retracting naphtha product cracks. Tender results for India's ONGC's second Far East Russia's Sokol crude tender are also expected.

** Traders anticipate deals on Papua New Guinea's Kutubu Blend, Australia's Cossack and Ichthys condensate this week.

** Trading activity by Brunei Energy and ConocoPhillips will be in focus following the release of Malaysia's Kimanis crude October loading program, together with tender results from Vietnam's PetroVietnam Oil.

** Traders will seek more clarity on tender results for Sudan/South Sudan's September loading Nile Blend, where sentiment is expected to dip following weaker Chinese demand.

Delivered crude

** Fresh tenders from Thailand's PTT and Taiwan's CPC Corporation for November delivered sweet crude are awaited, in which the US' WTI Midland crude could face competition from alternative arbitrage barrels.

** China's demand for November arrival cargoes of Brazilian Tupi crude is expected to remain weak following a lower trade level heard amid limited import quotas and COVID-19 outbreaks.

Crude futures

** Crude oil futures enter the week of Aug. 16-20 on a weak note as the demand outlook remains clouded by concerns over the fast spreading delta variant. China has imposed strict movement controls in many parts of the country, with oil demand set to take a hit. The US is also grappling with a surge in cases.

** The International Energy Agency Aug. 12 lowered its estimate for 2021 demand growth to 5.3 million b/d from 5.4 million b/d and cut its H2 2021 demand estimate by 600,000 b/d to 98.15 million b/d. It also noted the 120,000 b/d drop in July demand amid the coronavirus resurgence in China, Indonesia and elsewhere in Asia.

** International crude oil benchmarks were little-changed in the week to Aug.13. with October ICE Brent futures edging down 0.16% on the week to settle at $70.59/b and September NYMEX light sweet crude edging up 0.23% over the same period to $68.44/b.