DUBAI FUTURES: Intermonth spreads rangebound on unclear outlook

Singapore — Intermonth spreads for Dubai crude futures rangebound on unclear outlook

The intermonth spreads for benchmark Dubai crude futures were rangebound at midday Oct. 8 from the previous session as the near-term outlook for the market remained unclear.

The November/December Dubai crude futures spread was pegged at a contango of 30 cents/b At 12 pm in Singapore (0400 GMT), edging 1 cent/b wider from the Asia close on Oct. 7, S&P Global Platts data showed. The December/January spread was also pegged at a contango of 30 cents/b, widening 2 cents/b over the same period.

While the official selling prices released by key Middle Eastern producers in recent days were stable to slightly higher than the month before, in line with market expectations in Asia, trade sources said the direction of spot market differentials going forward would hinge on whether more demand emerges.

"Maybe if keen buyers come out from Japan and India [in October] then it's perhaps possible to charge a little bit of a premium [to OSPs]," a sour crude trader based in Northeast Asia said.

"Most buyers are still waiting and not in a hurry... supply is enough and [some sellers are] carrying November cargoes into the December loading cycle," the trader added.

The market is awaiting the release of now awaits more OSPs from Middle Eastern producers, as well as volume allocations.

Meanwhile, the prompt-month Brent/Dubai Exchange Futures for Swaps spread -- an indicator of Dubai's strength relative to Brent -- widened in positive territory Oct. 8.

The December EFS was pegged at plus 11 cents/b at midday Oct. 8, widening 6 cents/b from the Asia close the day before, Platts data showed.

ICE Brent futures saw an uptick in mid-morning trade in Asia Oct. 8 as the impact of a build in US crude inventories was negated by draws in product inventories, as well as escalating supply disruptions in Norway and the US Gulf of Mexico.