Dubai Futures: Talk of ADNOC's July cuts lifts Dubai crude spreads

Singapore — The July/August intermonth spread for benchmark Dubai crude futures was trading several notches higher Friday morning in Asia, as talk emerged in the market of the UAE's ADNOC cutting its crude export volumes for July in accordance with its OPEC+ commitment.

The spread was pegged at minus 20 cents/b at 10 am in Singapore (0200 GMT) Friday, up 16 cents/b from its assessment of minus 36 cents/b at Thursday's 4:30 pm Asian close, S&P Global Platts data showed.

The June/July spread, meanwhile, remained steady overnight, pegged in backwardation of 16 cents/b at 10 am, where it was assessed at Thursday's close.

Abu Dhabi National Oil Company may cut its July-loading volumes of crude to Asian customers by 5%, according to preliminary talk in the market Friday morning. The cuts would apply to all four grades of crude -- Murban, Das Blend, Umm Lulu and Upper Zakum, said market participants, who were still unsure of further details surrounding the recent news.

ADNOC was not immediately available for comment.

Several questions arose from the news, which market participants said they were still unsure of.

It was not immediately clear whether the reduction would be issued on top of ADNOC's production cuts that it issued to customers for June, they said.

"Is it a lower cut than for June, or is the 5% in addition to what was cut for June?" asked a trader with a South Asian refiner.

Additionally, it was not clear if this news was intended for all of the company's crude customers, or whether the cuts had been issued to certain buyers only, traders said.

"Not sure if [it is the] same [announcement] to everyone," a China-based trader. said

Last month, ADNOC cut June-loading volumes of its flagship Murban and Upper Zakum grades by 20%, and 5% for Umm Lulu and Das Blend. Before that, the state-owned entity had announced cuts of 15% and 5%, respectively, for May-loading volumes of the same grades.

The UAE -- OPEC's third largest oil producer -- agreed to cut output from about 4.1 million b/d in April to around 2.5 million b/d in May and June. The reductions are part of the action agreed by the

broader OPEC+ pact that will see 23 members trim output collectively by 9.7 million b/d during these two months.