Middle East sour crude complex expected to soften for November-loading cycle

Trading activity in the Middle East crude market in September is expected to soften amid weaker demand cues due to COVID-19 and the flow of arbitrage barrels from the West into Asia.

The bearish sentiment was visible Sept. 1 in the S&P Global Platts assessment of November cash Dubai on the first day of the new trading cycle.

Benchmark cash Dubai crude's premium to Dubai futures was assessed at $1.50/b to same-month Dubai futures at the 4:30 pm (0830 GMT) Singapore close Sept. 1.

The spread, a key indicator of spot market sentiment for sour crude in Asia, narrowed from the $2.22/b average premium for the whole of August, Platts data showed.

November cash Oman was assessed at a premium of $1.57/b to same-month Dubai futures at the 4:30 pm Singapore close, also down from the $2.33/b average premium for August, the data showed.

The sentiment remained subdued as the market awaits the outcome of the OPEC+ meeting Sept. 1, and the subsequent issuance of official selling prices by Middle East producers.

Market participants expected the group of oil producers to leave current plans on increasing supply unchanged, while expecting the region's producers to cut OSPs, traders said.

The Platts Market on Close assessment process Sept. 1 saw a total of six trades for November Dubai partials, with PetroChina, Equinor and Vitol on the sell side, while Glencore and BP were seen on the buy side.