Asia crude - Key market indicators this week

New York — The crude oil market was trading higher at the start of the Asian week Feb. 15, amid a strong outlook for economic recovery across the financial and commodity markets following progress in COVID-19 vaccine rollouts.

April ICE Brent crude futures were pegged at $63.62/b at 10.46 am Singapore time (0246 GMT) Feb. 15, up $2.40/b from the 12.30 pm Asian close on Feb. 11.

MIDDLE EAST CRUDE

**Trade activity in the week ahead, post-Lunar New Year holidays, could increase with a focus on purchases by Chinese refiners after limited buying activity in the first half of this month.

**Market participants await the issuance of Qatar Petroleum's Al-Shaheen tender, which could set the benchmark for spot April-loading cargoes.

**Cheaper arbitrage barrels from the West remain a threat to Middle East crude. Last week, Indian Oil Corp. was heard to have purchased 5 million barrels of West African crude and 2 million barrels of US crudes for arrival in April and May from Total, Equinor and Vitol.

**India's MRPL also issued a buy tender for 1 million barrels of sour crude for delivery over Apr. 1-10. The tender closes Feb. 17 with validity until Feb. 19.

**Market participants will be looking out for the outcome of Bahrain's tender offering 500,000 barrels of Banaco Arab Medium crude for loading in April, which closed Feb.10.

**Dubai cash-futures, or M1-M3, averaged 73 cents/b in the week ended Feb. 11, against 66 cents/b in the week ended Feb. 5.

**Intermonth spreads widened during morning trade Feb. 15 with April-May pegged at 59 cents/b, up 9 cents/b from the Feb. 11 Asian close.

**April Brent-Dubai Exchange of Futures for Swaps was pegged at $1.70/b early Feb. 15 in Asia, up 28 cents/b from Feb. 11.

ASIA PACIFIC CRUDE

**In the week of Feb. 15, the Asia Pacific sweet crude market may seek clarity on Pertamina's condensate tender for Apr. 10-26 delivery. Traders will also keep track of April-loading traded cargoes for Australia's North West Shelf.

**Market participants will be looking out for Qatar's DSC/LSC pre-tender trades of April-loading barrels and the outcome of QPSPP's tender, which closes Feb. 15, with next day validity. Market sentiment for the condensates remain upbeat amid firm naphtha, gasoline and gasoil margins.

**Traders are awaiting information on the availability of Australia's April-loading Cossack barrels after March shipments were shut in during the cyclone season, as well as Papua New Guinea's Kutubu loading schedule for April.

**More tenders may be expected across the sweet crude complex, especially from Vietnam. Loading program for Malaysian crude grades are expected to emerge amid an influx of arbitrage cargoes from West Africa to Asia, where the latter may exert some downward pressure on Malaysian crude prices, but the underlying gasoil and jet fuel product cracks may keep premiums afloat.

**Market participants will be looking out for subsequent trades of Far East Russia's Sokol crude, following the outcome of Indian OVL's first tender of the month for the grade, which was awarded to Japan's Idemitsu at a premium of $1.85/b to Platts front month Dubai assessments on a CFR basis.

DELIVERED CRUDE

**In the delivered crude market, traders will be watching for fresh Chinese seaborne procurement interests for the Brazilian Tupi crude, as sentiment for April to May delivery of the grade had weakened. It was heard offered at ICE Brent plus high-$1/b to $2.50/b, DES Qingdao, while a second-half April arrival had traded earlier at ICE Brent plus $1.80-$2/b, DES Qingdao.

**Market participants will be looking out for fresh tenders and spot trades from Asian refiners for US WTI Midland crude, following a trade with unknown laycan heard at Dated Brent plus $1.20/b, DES Singapore.

CRUDE FUTURES

**Crude oil prices may strengthen further this week, amid improved demand outlook and supply side fundamentals.

**Demand outlook continues to brighten on the back of global vaccine rollouts and expectations of a US stimulus package that may hasten economic recovery in the region.

**Supply tightness also remains with OPEC+ production cuts, Saudi Arabia's ongoing additional voluntary 1 million b/d cuts. Little increment in US shale production activity is seen despite soaring oil prices due to a lack of investment by oil majors and an Arctic blast across the US that is disrupting production.

**Crude oil futures strengthened during week to Feb. 12 amid strong fundamentals. The April contract for Brent had ended the week 5.21% higher at $62.43/b, whereas the March contract for NYMEX light sweet crude rose 4.61% to $59.47/b.