DUBAI FUTURES: Contango weakens slightly as trading ebbs off

Singapore — The contango for benchmark Dubai crude futures weakened slightly at noon on Sept. 21 amid a lack of trading momentum, with most purchases by refiners done during the week ended Sept. 19.

At 0400 GMT (12 pm Singapore time), the October/November timespread was pegged at a contango of 19 cents/b, widening 2 cents/b from the Asian close on Sept. 19, Platts data showed.

The November/December timespread was pegged at a contango of 21 cents/b, also widening 2 cents/b over the same period.

"I think the buying has more or less finished," a source from a Chinese refiner said on Sept. 21.

Sour crude uptake for September was mostly for need-based requirements, unlike the uptick seen last month when India bought more than they used to, trade sources said.

Overall aggregate demand failed to pick up significantly, with lackluster refining margins still an issue.

Supply-side concerns also lingered, after Libya's NOC lifted the force majeure on oil fields and ports.

The lifting could result in the return of up to 1.1 million b/d of crude oil that Libya had been pumping before the blockade was imposed, marking a significant increase over the 100,000 b/d pumped during the blockade.

The return of Libyan crude could add to the woes of the OPEC+ coalition, which has been struggling with non-compliance issues from members as it tapers its oil output cuts to 7.7 million b/d from August onwards, from the 9.7 million b/d cut mandated from May through July.