Dubai crude futures in stable contango as active spot trading continues

Singapore — Dubai crude futures timespreads were in a stable contango Aug. 19, with sentiment steady as active spot trading continues in the market.

At 12 pm Singapore time (0400 GMT) Aug. 19, the September/October Dubai crude futures spread was pegged at a contango of 59 cents/b, narrowing 1 cent/b from the Asian close on Aug. 18, S&P Global Platts data showed.

The October-November spread was pegged at a contango of 43 cents/b, widening 1 cent/b over the same period.

The intermonth spreads were rangebound, with sentiment in the sour crude market steady as more tenders and spot deals emerged in the week.

"The spreads may improve slightly as there is more trading and buying this week, but overall the fundamentals still don't support the market much, likely to still be in contango for the rest of the month," a sour crude trader said.

Spot differentials for most sour crude grades continued to trade in discounts versus Platts front month Dubai assessments, or against the grades' respective OSPs, according to trade sources.

The outcome for QPSPP's sell tender also emerged mid-week. The company sold two 500,000-barrel Al-Shaheen cargoes at an average discount of 61 cents/b against Platts Dubai assessments, FOB, market sources said Aug. 19.

On the supply front, the OPEC+ alliance will be meeting later Aug. 19 to discuss about compliance and compensation cuts through September for members who failed to abide by their output quotas from May to July.

Meanwhile, the October Brent/Dubai Exchange of Futures for Swaps was bid and offered between 20 cents/b and 24 cents/b at noon on Aug. 19, narrower compared with the 38 cents/b assessed at the Asian close on Aug. 18.

The narrower EFS was brought about by a larger decline in outright Brent crude values during mid-morning trade, amid a resurgence of COVID-19 infections in major European economies.