Dubai futures stable as market awaits release of more OSPs for cues

Singapore — Intermonth spreads in the sour crude market were stable in morning trade in Asia July 9 from the day before as participants awaited the release of more official selling prices, in the wake of announcements by Saudi Aramco and Abu Dhabi National Oil Company of price hikes.

The August/September Dubai futures intermonth spread was pegged at 26 cents/b in backwardation at midday Singapore time (0400 GMT) July 9, inching up 1 cent/b from the Asian close July 8, while the September/October spread was pegged at 9 cents/b in backwardation, unchanged over the same period, S&P Global Platts data showed.

Market participants are awaiting the release of more OSPs from key producers, as well as monitoring the progress of volume nominations this week, following the release of August OSPs by majors Saudi Aramco and ADNOC.

Saudi Aramco on July 6 raised the August OSP differential for all of its crude grades heading to Asia by $1/b, while ADNOC on July 8 set the August OSP of its Murban crude at Platts Dubai plus $1.75/b, up 75 cents/b from July.

ADNOC also increased the spread between medium crude grade Upper Zakum and Murban from parity in July to a 20 cent/b premium for August. This brings the August OSP differential for medium crude grade Upper Zakum to a premium of $1.95/b to Platts Dubai, up 95 cents/b from $1/b for July.

"The increase in the OSP is reasonable but still looks expensive overall... expecting further discounts [for differentials to OSPs]... now waiting for more to come out," a Northeast Asian crude oil trader said July 9.

The market is awaiting prices from Iraq, Kuwait and Qatar, among others. "Not expecting full volume allocations this round... margins are still bad and no one knows when demand will really return," a Singapore-based trader said.

Market participants are also monitoring talks over an Al-Shaheen tender for September-loading cargoes for pricing cues.