CRUDE MOC: Cash Dubai 'strong' despite easing from four-month high

New York — Benchmark cash Dubai eased at the Asian close on Dec. 4 after hitting a four-month high against Dubai futures the previous trading session, but the spread between the two was still considered to be strong, trading sources said.

February cash Dubai was assessed at 62.5 cents/b above same-month Dubai futures on Dec. 4, down 2.5 cents/b on the day, S&P Global Platts data showed.

The M1/M3 spread, a key indicator of sentiment in the Middle East sour crude market, was assessed at 65 cents/b on Dec. 3, the highest since July 21 when it was assessed at 66 cents/b, the data showed.

Despite the slightly lower spread on the day, market participants said the market was still largely elevated.

For the first four days of December, the spread has averaged a 53 cents/b premium, well above the 18 cents/b premium average in November, Platts data showed.

"It [Middle East market] still looks quite strong. Many believe 500,000 b/d of additional production [from OPEC+] is nothing," a Singapore-based crude oil trader said.

The OPEC+ alliance on Dec. 3 agreed to increase its collective production quota by 500,000 b/d from January despite some earlier expectations that it could extend the cuts until at least March.

In January, the producer group, which controls roughly half of global crude production capacity, will scale back its output cuts from 7.7 million/b currently to 7.2 million b/d.

As part of the deal, ministers will meet monthly to determine whether an adjustment -- capped at 500,000 b/d in either direction -- is needed, according to Russian energy minister Alexander Novak.

No date has been set for the January meeting.

On the demand side, market participants said they expect the strong demand from Asian buyers seen in previous months, particularly from India and China, to continue going into the February-loading cycle.

Most recently, Indian refiners IOC and HPCL were reported to be seeking various crudes, including from the Middle East, for delivery from late January to late February via tenders that remain valid until Dec. 4.