Jan Brent-Dubai EFS narrows but Middle East crude market sentiment remains strong

Sentiment in the Middle East crude market was strong Nov. 11 with focus shifting to spot differentials for January 2022-loading crudes amid higher official selling prices and healthy demand cues.

At 11 am in Singapore (0300 GMT), the January Brent/Dubai EFS was pegged at $5/b, narrowing 26 cents/b from the Asia close Nov. 10, S&P Global Platts data showed.

Spot trading was getting closer to a kick off with more OSPs being issued amid strong demand, and a wide Brent/Dubai spread supporting interest for Middle East grades, sources said.

However, sources said spot cargoes could trade at smaller premiums instead with the sharp hike in OSPs and the rally in the Dubai structure.

"My feeling [is] small premiums," a trader in Singapore said.

The Dubai M1-M3 spread has averaged $3.49/b in November so far compared with $2.42/b for October, Platts data showed.

Surging crude prices and a jump in OSPs have pressured buyers and could curb spot differentials when trade commences, the trader said.

Meanwhile, Iraq's State Oil Marketing Organization and Iran's National Iranian Oil Co. issued their OSPs for December.

For Asian buyers, SOMO set the December OSP for Basrah Medium crude at a premium of 90 cents/b to the monthly average of Oman/Dubai, up $1.30/b from November.

It raised the December OSP for Asia-bound Basrah Heavy crude by 40 cents/b to a discount of $2.35/b to the Oman/Dubai average, while the region's Basrah Light OSP was raised $1.50/b to a premium of $1.95/b versus Oman/Dubai.

NIOC also raised prices for its Asia-bound crude with a hike of $1-$1.40/b.

Intermonth spreads saw little change from the previous day's close.

The December/January spread was pegged at $1.52/b, down 4 cents/b from the Asian close Nov. 10, Platts data showed.

The January/February spread was pegged at $1.03/b, down 5 cents/b from the previous day's close.