Asia crude - Key market indicators this week

Singapore — The crude oil market in Asia started the Aug. 17 trading week higher ahead of a key OPEC committee meeting on Aug.19 and despite a postponement in the US-China trade deal review over the weekend.

October ICE Brent crude futures were pegged at $45.13/b at 0300 GMT Aug.17, up 39 cents/b from the Asian close Aug.14.

MIDDLE EAST CRUDE

** More tenders are expected to kick off in the sour crude market this week, after fresh official selling prices and volume allocations were out last week.

** The outcome of a key offer tender from Qatar Petroleum for October-loading Al-Shaheen and Qatar Land barrels, which closed Aug.17, could provide an indicator of the spot price trends for Middle East crude.

** Overall sentiment remains skewed to the bearish side, as suppressed cracking margins cap demand for sour crude grades.

** The Dubai cash/futures (M1/M3) spread could retain a downtrend amid bearish market fundamentals. The spread stood at a discount of 74 cents/b at the Asia close Aug.14, marking an eleven-week low, S&P Global Platts data showed.

** October Dubai futures were pegged at $44.61/b at 0200 GMT Aug.17, up 47 cents/b from the Asia close on Aug.14.

** Intermonth spreads were rangebound in mid-morning trade Aug.17 after a collapse seen on Aug.14, when the contango deepened sharply on the day. The September/October spread was pegged at minus 63 cents/b at 0300 GMT Aug.17, just 3 cents/b higher than the Asia close Aug.14.

** The October Brent/Dubai Exchange of Futures for Swaps was pegged at plus 52 cents/b at 0300 GMT Aug.17, slightly narrower compared with plus 60 cents/b at the Asia close Aug.14.

ASIA-PACIFIC CRUDE

** In the condensate market, traders will be looking out for the tender results of Indonesia's Pertamina is which is seeking condensate for H2 October delivery, expected on Aug.20.

** Market practitioners would also be looking out for any spot trades for October loading Australia's North West Shelf condensate in the week beginning Aug.17, with expectation for price differentials to fall further into discounts of around $4/b or lower to Platts Dated Brent on a FOB basis,

** Tender results of Qatar Petroleum's spot tender for October loading Deodorized field condensate and term results for Low-sulfur condensate will be awaited, with expectation for price differentials on the bearish side, traders said.

** Tender results of October loading Vietnamese crudes including Te Giac Trang and Su Tu Den are expected this week, while more spot tenders offering October loading Malaysian and Vietnamese grades are also expected in the week beginning Aug.17, traders said.

** In the heavy sweet crude market, with only Australia's Vincent being offered in the spot market for October loading, market participants expect price differentials to hold steady from the previous month although demand could weaken.

DELIVERED ASIA CRUDE

** In the delivered crude, demand from Chinese independent refiners continue to remain sluggish for US WTI Midland crude. Trade valuations for November delivery cargoes are heard around Dubai plus around high $1/s-$2/b, DES

** For Brazilian Lula crude, offer levels for November delivery cargoes have dropped to around 50 cents/b against January ICE Brent Futures, DES Qingdao basis with Chinese teapots expected to emerge with buying interest this week.

CRUDE FUTURES

** Crude futures continued trading in a tight range as supportive, larger-than-expected drawdown in US commercial crude inventories for the third consecutive week was countered by a weak global demand outlook.

** The Organization of Petroleum Exporting Countries and the International Energy Agency lowered their 2020 world oil demand estimate by 100,000 b/d and 140,000 b/d to 90.63 million b/d and 91.95 million b/d respectively. Analysts believe that risks remain skewed to the downside and a faltering economic recovery and rising global supply could derail a potential fourth consecutive monthly increase in crude oil prices since May.

** The prompt intermonth timespread for Brent swaps averaged minus 38 cents/b in the week ending Aug.14, widening slightly compared to minus 37 cents/b the week before.

** OPEC+ will be having their Joint Ministerial Monitoring Committee meeting on Aug.19, a day later than originally scheduled following a request from Russia. The alliance eased from a historic 9.7 million b/d production cuts to 7.7 million b/d in August and no further changes are expected to be proposed in the upcoming meeting.