Middle East crude ticks lower, inter-month spreads ease from month-to-date high

New York — Dubai inter-month spreads eased slightly mid-morning of June 18 after rising on June 17 on the back of bullish sentiment for medium, heavy grades in the Middle East sour crude market.

The July/August Dubai crude futures spread was pegged at 8 cents/b backwardation at the 11 am in Singapore on June 18 (0300 GMT), down from the 12 cents/b premium assessed at Asian close on June 17.

The backwardation for the July/August spread assessed on June 17 was the highest for June so far and reflected an uptick in sentiment backed by supply cuts amid steady demand for medium heavy Middle East sour crude, traders said.

Similarly, the August/September spread also eased to minus 19 cents/b in the morning of June 18, from minus 16 cents/b assessed at the 4.30 pm Singapore close (0830 GMT) on June 17.

Spot trading activity in the Middle East sour crude market was expected to pick up following the conclusion of Qatar's Al-Shaheen tender, traders said.

In that tender, Qatar Petroleum for the Sale of Petroleum Products, or QPSPP, was heard to have sold two 500,000-barrel cargoes of Al-Shaheen crude, for loading over August 2-3 and August 29-30, at an average of $1.56/b to Platts Dubai crude assessment.

"Hearing none [was] done pre-tender, so they [buyers] are OK to wait post tender [before making purchases]," said a North Asian crude trader.

Meanwhile, front-month Brent/Dubai Exchange Futures for Swaps continue to widen mid-morning of June 18 with the August EFS pegged at $1.15/b, up 28 cents/b from the 87 cents/b assessed at the Asian close on June 17.

The EFS was last higher on March 9 when it was assessed at $1.17/b, S&P Global Platts data showed.

The August Dubai futures was pegged at $39.11/b mid-morning June 17, down 3.4% from the Asian close on June 17.