Market structure for Dubai crude futures softens amid lack of fresh cues

Singapore — The market structure for benchmark Dubai crude futures softened slightly in mid-morning Sept. 29 amid the absence of fresh cues.

At 11 am Singapore time (0300 GMT), the October/November spread was pegged at a contango of 14 cents/b, widening 1 cent/b from the Sept. 28 Asian close.

The November/December timespread was pegged at a contango of 23 cents/b, widening 3 cents/b over the same period, S&P Global Platts data showed.

Most market participants were looking towards new official selling prices in the coming month, with expectations of mild increases.

"I'm not sure to what extent but it's likely to be a raise [for OSPs] next month looking at the recovery in Dubai structure," a source from a northeast Asian refiner said.

The Dubai cash-futures (M1-M3) spread averaged slightly higher in September so far at minus 53 cents/b, compared to minus 63 cents/b in August, data showed.

The spread is a key sour crude market indicator, tracked by Middle Eastern producers to define the core direction and extent of price hikes or cuts.

Meanwhile, cracking margins showed some improvement for light distillates. Asian gasoline cracks have risen to six-month highs amid improving regional gasoline fundamentals in the near term.

However, middle distillate cracks remained lackluster. The overall jet fuel complex remains weak due to the coronavirus pandemic.