Dubai crude futures intermonth spreads narrow slightly on brisk spot trading

Singapore — Intermonth spreads for benchmark Dubai crude futures narrowed slightly in mid-morning trade Aug. 20, amid an active week of spot trading in the sour crude market.

At 11 am Singapore time (0300 GMT) Aug. 20, the September/October Dubai crude futures spread was pegged at a contango of 65 cents/b , narrowing 2 cents/b from the Asia close on Aug.19, S&P Global Platts data showed.

The October/November spread was pegged at a contango of 42 cents/b, narrowing 3 cents/b over the same period.

Spreads have improved slightly as trading momentum gathered pace in an active trading week for the October-loading cycle.

Nonetheless, the temporary boost in buying was more for monthly need-based purchasing requirements rather than a true uplift in demand, trade sources said.

The physical market structure still leaned towards downside, with October cash Dubai assessed at a discount of 87 cents/b to same-month futures on Aug. 19, sliding 23 cents/b day on day, Platts data showed.

The cash/futures spread for Dubai crude had trended lower compared to early August, when it was at a discount of 38 cents/b, data showed.

Meanwhile, the market awaits more buy-tenders to be concluded for the week ending Aug.21.

In OPEC+ updates, Saudi Arabia on Aug. 19 continued to lay pressure on the alliance's quota violators to make up for their excess crude production, with deeper cuts in the coming weeks.

Data compiled for the committee and seen by S&P Global Platts shows the 23-country OPEC+ coalition exceeded its quotas by 357,000 b/d from May to July, Platts reported earlier.

The coalition has eased its cuts to 7.7 million b/d from August through the end of the year, in anticipation of higher demand, though the compensation cuts should offset a chunk of that.