DUBAI FUTURES: Market structure strengthens amid higher activity, OPEC+ meeting

Singapore — The market structure for benchmark Dubai crude futures strengthened in noon Asia Sept. 18 amid a flurry of activity seen in the spot market during the week starting Sept. 13, as well as an OPEC+ meeting on Sept. 17.

At 0400 GMT (12 pm Singapore time), the October/November timespread was pegged at a contango of 17 cents/b, narrowing 11 cents/b from the Asian close on Sept. 17. The November/December timespread was pegged at a contango of 19 cents/b, narrowing 10 cents/b over the same period, Platts data showed.

More spot cargoes traded into the week ending Sept. 18, with sour crude differentials seen edging up slightly on the week.

Murban crude was mostly trading between plus 20 cents/b to 30 cents/b versus the official selling price for November cargoes, trade sources said during the week. This compares slightly higher from parity versus OSP, indicated by market participants a week ago.

Upper Zakum crude for November loading was also heard traded at around plus 15 cents/b versus its OSP during the week.

Meanwhile, the market structure also remains supported as the market eyes tightened OPEC+ compliance.

Saudi energy minister Prince Abdulaziz bin Salman on Sept. 17 said he has secured commitments from OPEC+ compliance laggards to make good on their pledged crude production cuts by the end of December, Platts had reported.

"We will never leave this market unattended," Prince Abdulaziz told reporters after a meeting of the OPEC+ Joint Ministerial Monitoring Committee he co-chaired with Russian counterpart Alexander Novak. "Whoever gambles on this market will be 'ouching' like hell," he added.

The OPEC+ coalition in August rolled back its historic 9.7 million b/d production cut accord to 7.7 million b/d and is scheduled to relax it further to 5.8 million b/d at the start of 2021.

Still, rather than tightening quotas, the JMMC decided to continue with current production cuts and instead reapply pressure on compliance delinquents to fulfill their commitments.