Asia crude - Key market indicators this week

New York — The crude oil market in Asia started the week of Aug. 31 higher as sentiment was lifted by robust economic data from the US and developments in the race for a COVID-19 vaccine.

Front-month November ICE Brent crude futures was pegged at $46.11/b at 0300 GMT Aug. 31, up 67 cents/b from the Asian close Aug. 28.

MIDDLE EAST CRUDE

**The sour crude market enters the November-loading trading cycle from Sep. 1 and the market looks towards new official selling prices in the coming days.

**Market participants surveyed by S&P Global Platts are expecting the upcoming Oct OSPs to be cut for a second consecutive month.

**The Dubai cash/futures (M1/M3) spread averaged at minus 65 cents/b in August so far, sliding from an average of plus 71 cents/b seen in July.

**October Dubai futures were pegged at $45.48/b in mid-morning trade Aug. 31, up 70 cents/b from the Asia close on Aug. 28.

**Prompt intermonth spreads were in a rangebound contango mid-morning on Aug. 31, with September/October pegged at minus 36 cents/b, compared with minus 32 cents/b at the Asia close on Aug. 28.

**The November Brent/Dubai Exchange of Futures for Swaps was pegged at 41 cents/b mid-morning, compared with 44 cents/b at the Asia close on Aug. 28.

ASIA-PACIFIC CRUDE

**Market participants would be looking out for official selling prices from Malaysia and Indonesia for their August loading cargoes in the week beginning Aug.31.

**In the condensate market, traders would be looking out fresh loading program for Australia's North West Shelf condensate in the week beginning Aug .31, with sentiment still on the downtrend amid weak margins.

**Market participants would also be eyeing buy tender details from China's Fuhaichuang seeking November delivery condensates in the week beginning Aug.31.

**Unsold barrels of October loading Malaysian barrels including Kikeh, Kimanis and Kidurong are expected to trade in the week beginning Aug.31, with cash differentials expected to slip in view of the bearish outlook.

DELIVERED ASIA CRUDE

**In the delivered crude market, offer levels for November delivery Lula crude have increased to $1/b to January ICE Brent Futures on a DES basis amid lower exports from Brazil with traders looking to see if there would be any spot trade at this level in the week beginning Aug.31.

**Sentiment for US WTI Midland crude delivered into Asia was bullish supported by hurricane related fears in the US although demand in Asia remained muted. Last heard valuation were around mid-high $1s/b to Platts Dated Brent on a DES basis and traders would be watching if more spot deals are concluded at this level in the week beginning Aug.31.

CRUDE FUTURES

**Crude futures climbed higher in the week ending Aug. 28 as US braced for a possibly supply disruption risk from Hurricane Laura. Both the Brent marker and WTI broke out of their near-term resistance levels and traded comfortably above $45/b and $43/b respectively.

**A fifth consecutive week of drawdown in US commercial crude inventories and a larger-than-expected drawdown in gasoline supplies for the week ending Aug. 21 also provided support to the market, latest data released by the US Energy Information Administration on Aug. 26 showed.

**The prompt intermonth timespread for Brent swaps averaged minus 40 cents/b in the week ending Aug. 28, narrowing compared to minus 48 cents/b the week before.

**Analysts believe that the focus will shift back to the near term pace of the global economic recovery and the supply-demand dynamic amid the coronavirus pandemic.

**While the short-term outlook continued to be skewed to the downside given rising supply and demand uncertainty, medium and longer-term outlook points to a tightening market and higher oil prices as vaccine hopes and robust US economic data supports the market.