Brent/Dubai September EFS spread widens; India seeks more arbitrage crude

The front-month Brent/Dubai Exchange of Futures for Swaps, or EFS, spread widened in midmorning Asia trade July 28 while India issued another spot tender to satiate its growing crude appetite.

The September Brent/Dubai EFS spread was pegged at $3.98/b at 11 am Singapore time (0300 GMT) July 28, widening 39 cents/b from the 4:30 pm Singapore close July 27, S&P Global Platts data showed.

The Brent/Dubai EFS is a key indicator of the spread between light, sweet and heavy, sour crudes, and a wider EFS makes crude priced against Dubai more economically attractive for Asian refiners compared with Brent-linked ones.

Indian Oil Corp., the country's largest refiner, issued a tender seeking unspecified volumes of West African and US crude grades for delivery in October. The tender closes July 29 with same-day validity.

While India's recovery from a second wave of the pandemic has sparked greater oil demand from the country, cheaper arbitrage barrels from the US and lower freight levels also enhance viability, sources said.

"India is okay to take either way [from West Africa or US] because of freight savings," said a crude oil trader in Singapore.

The market also awaited the outcome of fellow Indian refiner MRPL's crude tender. The refiner issued two concurrent tenders seeking 1 million barrels of crude in total from various regions, including the Middle East, for loading in September. The tenders close July 28 and July 30, respectively.

The spread between Brent swaps and Dubai swaps for September was pegged at $2.19/b midmorning July 28, up 4 cents/b from the close July 27, Platts data showed.

At midmorning in Singapore, the September/October Dubai time spread was pegged at 97 cents/b, up 1 cent/b from the previous day's close, the data showed.

The October/November Dubai time spread was pegged at 81 cents/b, widening 4 cents/b from the July 27 close.