Crude MOC: Sour crude complex strengthens amid tight supply outlook

The sour crude complex strengthened Nov. 4 amid expectations of tight crude supply, after OPEC+ resisted calls to further loosen the taps for December production, fueling concerns of demand recovery outstripping supply.

S&P Global Platts assessed January cash Dubai versus same-month Dubai futures at a premium of $3.36/b at the close on Nov. 5, up 28 cents/b from the Nov. 3 close.

January cash Oman was assessed at a premium of $3.70/b at the close on Nov. 5, up 20 cents/b from the Nov. 3 close, Platts data showed.

Market participants expect that OPEC+'s decision to stick to its initial plan of increasing production by 400,000 b/d in December will tighten supply in the market as demand continues to recover, and prove supportive for flat prices.

"OPEC [continued] the cuts that will support crude [flat price]," a trader at a North Asian refinery said.

Furthermore, there are lingering concerns that some OPEC+ members may be unable to ramp up production to meet quotas, which could result in actual production volumes being even lower than the production permitted by the quotas.

Traders are now looking towards the issuance of official selling prices of key Middle East producer Saudi Aramco before commencing physical trading activity for January-arrival cargoes.

"Seems most cargoes are sold, not hearing much overhang from the previous cycle," a crude oil trader based at a North Asian refinery said.

Three Dubai partials were traded during the Market on Close assessment process on Nov. 5.

The partials were traded with Koch and TotalEnergies on the sell side and Gunvor on the buy side.