Asia crude oil: Key market indicators for Sep 13-17

Crude oil futures were higher in mid-morning trade in Asia Sept. 13, as sentiment remained supported by concerns about tight US supply in the aftermath of Hurricane Ida and as Tropical Storm Nicholas moves up the Texas coast.

ICE November Brent crude futures stood at $73.35/b as of 0300 GMT Sept. 13, up 43 cents/b (0.59%) from its Sept. 10 settlement price.

Middle East crude

** Spot trading activity for November-loading cargoes is expected to pick up pace this week as more spot tenders could emerge including Qatar Petroleum's tender offering Al-Shaheen crude.

** Eyes will be on Saudi Aramco's term allocations for October. Amid more supplies, market participants expect the producer to offer full allocations which could weigh on spot trading in the month ahead.

** Market participants will also watch supply disruptions in the US which could slow the movement of arbitrage barrels into Asia thereby providing some support to Middle East crudes.

** Dubai cash/futures (M1/M3) averaged $1.41/b in the week ended Sept. 10, against $1.80/b in the week ended Sept. 3.

** Intermonth spreads were higher/lower during mid-morning trade Sept. 13 with November/December pegged at 72 cents/b, down 1 cent/b from the Asia close Sept. 10.

** November Brent/Dubai Exchange of Futures for Swaps was pegged at $3.33/b at mid-morning Sept. 13, down 11 cents/b from the Asia close Sept. 10.

Asia Pacific crude

** Market participants await results of Pertamina's procurement tender for November arrival condensates. As the November loading cycle commences for regional markets, a shorter NWS loading program coupled with recovering naphtha may buoy sentiment on the light sweet condensates.

** On Qatari condensates, market participants await results of QPSPP's tender for November-loading LSC cargoes which close on Sept. 14 with next-day validity.

** For Far East Russian grades, market participants await tender results from India OVL's second November loading Sokol tender following a first deal done at a premium of $3.80/b to Platts front-month Dubai assessments, CFR Yeosu.

** Trading activities for Australia's Cossack and Ichthys Field Condensate are expected to kick off. Traders also await the November loading program for Papua New Guinea's Kutubu Blend.

** On regional crudes, traders will be looking out for the Malaysian loading program for November-loading cargoes, as well as tender results from PV Oil's Chim Sao and Su Tu Den crude.

** For heavy sweet crudes, market participants are on the lookout for Australia Santos' October-loading barrels of Van Gogh crude, which are heard yet to be sold.

Delivered crude

** Following a widening Brent/WTI spread, WTI Midland crude is expected to remain competitive with regional grades.

** Cash differentials for December-arrival cargoes of Brazilian Tupi crude are expected to inch higher following pockets of Chinese demand heard amid tight production levels.

Crude futures

** Crude oil prices this week should be supported by carryover effects of the supply destruction caused by Hurricane Ida. Furthermore, Tropical Storm Nicholas, which is expected to pass near Northeastern Mexico and south Texas on Sept. 13 morning, may also cause a tightening of supply, which may keep prices elevated over the week.

** As of Sept. 10, 1.207 million b/d, or 66.36%, of US Gulf of Mexico crude oil production remained offline, according to the US Bureau of Safety and Environmental Enforcement.

** In Libya, protesters were blocking oil exports at the ports of Es Sider and Ras Lanuf. This is a fresh wave of protests at key oilfields and ports and could reduce production by as much as 800,000 b/d.

** On Sept 9, China announced that the country will release a part of its state oil reserves through public auction to offer domestic refiners relief from high feedstock costs. Analysts pointed out that the release will be bearish for the market sentiment.

** Data from the Energy Information Administration showed the US crude inventories declined 1.53 million barrels in the week ended Sept. 3 to 423.87 million barrels, leaving them around 6% behind normal for this time of the year. Total motor gasoline inventories decreased 7.2 million barrels last week and are about 4% below the five-year average for this time of the year.

** In the week ended Sept. 10, the international crude oil benchmarks were higher on the week. The November contract for ICE Brent futures rose 0.43% on the week to settle at $72.92/b, while the October contract for NYMEX light sweet crude was up 0.62% at $69.72/b.