Dubai futures spreads rangebound ahead of key sour crude tender result

Singapore — Intermonth spreads for Dubai crude futures were rangebound in mid-morning trade in Asia Aug. 17 ahead of the close of a closely-watched Middle East crude spot tender.

The September/October Dubai crude futures spread was pegged at a contango of 63 cents/b at 11 am Singapore time (0300 GMT) Aug. 17, narrowing 3 cents/b from the previous Asian close, S&P Global Platts data showed.

The October/November spread was pegged at a contango of 48 cents/b, narrowing 1 cent/b over the same period.

Intermonth spreads continued to trade rangebound in contango from late last week as the sour crude market awaited the result of a key tender in the coming days.

Qatar Petroleum for the Sale of Petroleum Products, or QPSPP, is due to close its tender offering two cargoes of Al-Shaheen crude and one cargo of Qatar Land crude for October loading later Aug. 17. QPSPP in July sold two 500,000-barrel Al-Shaheen cargoes at an average premium of $1.46/b to Platts Dubai assessment, FOB.

Buy tenders were also expected to be released this week, sources said.

The sour crude market was likely to remain in contango in the near term amid underlying bearish fundamentals, market sources said .

October cash Dubai was assessed down 2 cents/b day on day at a discount of 74 cents/b to same-month futures on Aug. 14. The spread has been on a downtrend since early August, Platts data showed.

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