Dubai crude complex mixed as market measures US role in OPEC+ talks

Singapore — Benchmark Dubai crude futures and intermonth spreads traded in a well-worn range in mid-morning trade in Asia Tuesday, with activity limited in the region for Middle East crudes as traders exercise caution ahead of a risky OPEC+ webinar meeting on Thursday.

Crude traders in Asia said it was unlikely that the US would participate in any production cut deal, diluting the efficacy of a larger-scale production cut.

"Legally the US cannot do that," said a trader based in Singapore, on the subject of US participation in a coordinated production cut.

But US companies may be forced to cut production anyway if prices continue to fall, market participants in Asia noted.

Several market participants quoted 10 million b/d as a soft target for the talks scheduled for Thursday, but said that would be difficult to achieve by a Saudi-Russian alliance alone.

The June Dubai crude futures contract was pegged at $35.70/b at 11 am in Singapore (0300 GMT) Tuesday, up from its assessment at $34.30/b at the close of trading in Asia Monday.

However, intermonth spreads for Dubai crude futures ticked lower Tuesday morning, with the May/June spread pegged at minus $1.27/b at 11 am. The spread had been assessed at minus $1/b at the 4:30 pm (0830 GMT) close Monday.

Dubai's premium to ICE Brent futures widened early Tuesday, albeit after narrowing sharply in recent days as oil prices gained ground on the promise of new production cuts, with additional encouragement from the US.

The June Brent/Dubai Exchange Futures for Swaps spread, which was assessed at minus $1.09/b Monday, widened to minus $1.75/b Tuesday morning in Singapore.

After sparking a dialogue between OPEC+ leaders Saudi Arabia and Russia, US President Donald Trump has appeared to reverse his stance on engaging in cooperation on a production cut deal. Trump said after meeting with the CEOs of several US oil companies that he was not inclined to force them into reining back output before escalating his rhetoric on Saturday, threatening tariffs on US oil imports and claiming that OPEC and Russia would be "destroyed" if they did not reach a new supply accord.

"I had been against OPEC all my life; because what is it? It's illegal, you can call it a cartel, a monopoly. I couldn't care less about OPEC," he said.

Meanwhile, activity in the dirty tanker market -- which continues to reach new highs amid surplus crude production -- may ease slightly as inquiries recede for the week, traders said.

"Nobody will charter [ships] till OPEC+ comes out with a statement," one trader said.