CRUDE MOC: Dubai spread dives to minus $10/b amid vast market inequilibrium

Singapore — June cash Dubai's discount to futures plunged to minus $10/b at the end of the Platts Market on Close assessment process Tuesday, underscoring the degree of imbalance in the Middle East sour crude market as Saudi crude output rose to 14-month highs.

This is the lowest on record for the June Dubai cash/futures spread, a key gauge of spot market sentiment for Middle East sour crude in Asia. The spread was assessed at minus $9.41/b on Monday.

The spread's lows come ahead of a key OPEC+ meeting to be held on Thursday, where oil kingpins Saudi Arabia and Russia will lead the discussion on whether to rein in crude production levels in a coordinated manner as global oil demand continues to crater to multi-year lows.

Spot trading activity for the June loading cycle is yet to kick off, crude traders told S&P Global Platts on Tuesday, as market participants deem trading too risky before a decision on future production cuts.

Official selling prices from Middle East producers, which could provide some cues as to the direction for trading sentiment for the current cycle, have also been put on hold by producers till after Thursday's meeting.

Meanwhile, the monthly Platts OPEC production survey revealed Saudi crude output climbed to a 14-month high of 10.15 million b/d over March.

The OPEC kingpin, which said it planned to pump at its maximum capacity of 12 million b/d starting in April, boosted its production to 10.15 million b/d in March, just above its quota of 10.144 million b/d, the survey found.

Its crude exports were up significantly, hitting close to 9 million b/d in the last week of the month, according to provisional data from Platts trade flow software cFlow, and the kingdom also boosted its inventories.

Close ally the UAE aggressively pushed its crude output to 3.45 million b/d, blowing past its cap of 3.012 million b/d, while Kuwait pumped 2.90 million b/d, well above its quota of 2.669 million b/d.

Overall, OPEC's March production was a 980,000 b/d jump from February, the survey found.

OPEC+ ministers are scheduled to meet Thursday via a webinar, with an emergency summit of G20 energy ministers tentatively set for Friday.