Dubai futures contango widens slightly on demand uncertainty

Singapore — The contango for benchmark Dubai crude futures had widened slightly at midday Oct. 20 from the previous session as demand uncertainty continued to limit market recovery.

At 12 pm in Singapore (0400 GMT), the November/December timespread was pegged at a contango of 21 cents/b, widening 3 cents/b from the Asia close Oct. 19, S&P Global Platts data showed.

The December/January intermonth spread was pegged at a contango of 25 cents/b, also widening 3 cents/b over the same period, the data showed.

Mixed views on demand continued to limit a recovery in the crude oil market structure.

December cash Dubai crude was assessed at a discount of 64 cents/b to same-month Dubai futures at the 4:30 pm (0830 GMT) Singapore close Oct. 19, down 4 cents/b from the previous session Oct. 16, data showed.

"More Chinese independent refiners are back to buying so you see markets like ESPO rebounding," a crude trader in Northeast Asia said. "But if you look at the margins, there's an improvement but it's not significant," the trader added.

Cracking margins for refined products like gasoline and naphtha have recovered in recent weeks, but levels were still much lower than at the same time last year, sources said.

Meanwhile, the prompt-month Brent/Dubai Exchange Futures for Swaps spread had narrowed at midday Oct. 20 from the previous session. The December EFS was pegged at 25 cents/b at 0400 GMT, narrowing 11 cents/b from the Asia close on Oct. 19.

ICE Brent crude oil futures fell during mid-morning trade in Asia Oct. 20 as concerns over the scheduled easing of OPEC+ production cuts continued to weigh on markets reeling from a lack of demand.