Asia crude oil: Key market indicators for Nov 8-12

Crude oil markets started the Nov. 8-12 trading week stronger after the OPEC+ alliance resisted calls for greater increases in production for December during their Nov. 4 meeting, raising expectations of supply tightness.

ICE January Brent crude futures stood at $83.76/b at 0300 GMT Nov. 8, up $1.02/b (1.23%) from the Nov. 5 settlement.

Middle East crude

** Market participants will be looking out for official selling prices from other Middle East producers such as QatarEnergy and Iraq's SOMO; after which spot activity for January-loading crude kicks off.

** Last week, key Middle East producers Saudi Aramco and Abu Dhabi's National Oil Company issued OSPs for December. Saudi Aramco hiked OSPs by $1.10/b-$2.80/b across its Asia-bound crude grades loading in December.

** Spot buying for January-loading crude is expected to be strong amid an ongoing seasonal uptick in winter demand, higher OSPs, tighter supply from OPEC+ producers and a wide Brent-Dubai EFS stemming the flow of arbitrage barrels from the West.

** Dubai cash-futures (M1-M3) averaged $3.36/b in the week ended Nov. 5, against $2.57/b in the week ended Oct. 29

** Intermonth spreads were wider during mid-morning trade Nov. 8 with January-February pegged at 86 cents/b, up 6 cents/b from the Asia close Nov. 5.

** January Brent-Dubai Exchange of Futures for Swaps spread was pegged at $4.97/b mid-morning Nov. 8, down from $5.04/b at the Nov. 5 Asian close.

Asia Pacific crude

** Market participants await Australian North West Shelf condensate January loading program and potential demand from Indonesia's Pertamina, while closely monitoring any overhang in December-loading barrels.

** On Qatari condensates, tenders for January loading DFC and LSC will be in focus as naphtha crack spreads kicked the month off on a strong note.

** Indian OVL's Far East Russian Sokol crude tender is expected to be issued this week, with cash premiums likely to remain resilient amid a wide Brent-Dubai EFS.

** The January-loading program for Australia's Ichthys Field Condensate, Cossack and Papua New Guinea's Kutubu Blend are expected to be released later this week.

** Southeast Asia-based traders will be looking out for fresh tender activity from Vietnam's PV Oil and the January-loading program for Malaysia's Kimanis crude.

** Market participants will also be watching out for trade activity in medium heavy and heavy sweets, including December loading barrels of Sudan/South Sudan's Dar Blend and Australia's Vincent crudes, as sentiment has improved amid stronger LSFO cracks.

** Traders await clarity on Indonesia's October ICP and Brunei's September OSP this week.

Delivered Crude

** Market participants keep a lookout for fresh trades of Brazil's February-arrival Tupi crude, as run rates from Chinese state-owned enterprises remain upbeat.

** Arbitrage flow of US' WTI Midland crude into Asia is expected to remain thin amid a narrower M2 Brent-WTI spread.

Crude futures

** Crude oil futures started the week on a bullish note mid-morning Nov. 8 amid a broad risk-on sentiment in financial markets following a strong US jobs report and news of Pfizer's antiviral drug.

** Outlook for jet fuel demand to get a boost as the US reopens its borders to vaccinated travelers across the world Nov. 8.

** Vitol's Asia head Mike Muller said Nov. 7 global oil inventories have fallen to pre-pandemic levels and may face further tightness as OPEC+ spare capacity nears a critical level by the middle of next year.

** In the week ended Nov. 5, the international crude oil benchmarks were lower on the week. The January contract for ICE Brent futures fell 1.17% on the week to settle at $82.74/b, while the December contract for NYMEX light sweet crude was down 2.75% at $81.27/b.