Intermonth spreads for Dubai crude futures rangebound on tepid activity

Singapore — The intermonth spreads for benchmark Dubai crude futures were softer at noon on Sept. 30, as sour crude activity was tepid with the November trading cycle approaching its end while prospects of bearish demand capped gains.

At 12 pm Singapore time (0400 GMT), the October/November spread was pegged at a contango of 18 cents/b, widening 2 cents/b from the Sept. 29 Asian close, S&P Global Platts data showed.

Meanwhile, the November/December timespread was pegged at a contango of 27 cents/b, widening 5 cents/b over the same period.

The sour crude market will enter a new trading cycle starting Oct. 1, with sentiment still leaning towards the bearish side for now, trade sources said.

Overall, Asian demand is unlikely to improve significantly towards the end of the year as refining cracks remain weak.

Middle Eastern sour crude demand has also weakened as some end-users are looking for more competitive barrels from other regions, according to trade sources.

Key end-user market was heard to have taken more West African crude barrels in the last few weeks. In addition, demand is expected to be thin out as Chinese independent refiners run out of import quotas into the end of the year, sources added.

With the exception of light distillates, cracking margins for most refined products showed little signs of improvement.

Refining margins for gasoil and jet fuel remained weaker on the month, Platts data showed. This has dampened overall uptake for medium-heavy sour crudes this month, sources said.