CRUDE MOC: Sour complex rangebound; spot trading expected to ease

The benchmark cash Dubai premium against Dubai futures was largely steady at the Asian close June 18, with signs of spot trading activity easing in the week ahead.

S&P Global Platts assessed August cash Dubai at a premium of $2.04/b to the same-month Dubai futures at the 4.30 pm Singapore close on June 17, down 2 cents/b from the previous day.

August cash Oman was pegged at a premium of $2.10/b to same-month Dubai futures at the Singapore close, flat from the previous day.

After a surge of spot trading in the market in the past week, market participants now expect activity levels to slow down and price levels to remain steady.

"This week would be the peak week packed with many trading. From next week onwards, trading would taper off," said a trader at a North Asian refinery.

A widening front-month Brent/Dubai Exchange of Futures for Swaps continued to support demand fundamentals for Dubai-linked grades for Asian refineries, but further upside in cash differentials for these grades could be limited as refining margins get squeezed, sources said.

"I feel the market is toppish...only China demand is good," said another trader at a North Asian refinery.

In addition, refineries in India were showing a preference for sweet arbitrage crude grades from West Africa and the US over sour crude from the Middle East, sources said.

"Low sulfur [crudes] are making more sense for Indian refineries despite the wide Brent/Dubai EFS, due to strong cracks for gasoline, diesel and VLSFO...Sour grades may not be that attractive," said a trader at a South Asian refinery.

The Platts Market on Close assessment process saw 15 August Dubai partials of 25,000 barrels traded.

The Dubai partials were traded with China's Unipec and India's Reliance on the sell side and Glencore, Trafigura, Lukoil and Gunvor on the buy side.