Dubai futures spreads rangebound on lack of fresh cues

Singapore — Intermonth spreads for benchmark Dubai crude futures were rangebound in midmorning Asia trade Aug. 26 amid a lack of fresh cues, as spot trading cooled off with just a few days left before the month concludes.

At 11 am Singapore time (0300 GMT), the prompt September-October Dubai crude futures spread was pegged at a contango of 38 cents/b, widening 1 cent/b from the Asia close on Aug. 25, S&P Global Platts data showed.

The October-November spread was pegged at a contango of 17 cents/b, narrowing 2 cents/b from the previous day's Asia close.

Dubai's spread to ICE Brent futures, or the Brent-Dubai Exchange Futures for Swaps, was also rangebound in midmorning Aug. 26, with the Brent complex steadying on mixed demand and supply drivers.

October Brent-Dubai EFS was pegged at 20 cents/b as of 0300 GMT, narrowing just 2 cents/b from the Asia close on Aug. 25, Platts data showed.

Brent steadied amid lingering concerns over COVID-19, countered by support from possible supply tightness as two tropical storms approach the US Gulf Coast, which could lead to refineries getting taken offline.

Meanwhile, sour crude trading activity is expected to remain tepid into the week as most Asian refiners have concluded their October-loading purchases.

The market outlook was still subjected to downward pressure, with some spot supply remaining unsold for the cycle, according to sour crude trade sources.

"Seems all quiet now ... [most] Indian buyers must have finished buying, the rest of the barrels will be hard to sell now," a source from a China-based trading house said.

In the Platts Market on Close assessment process on Aug. 25, China's Unipec lifted an offer from Singapore-based ExxonMobil Trading Asia Pacific for a 500,000-barrel cargo of Upper Zakum crude.

The cargo was for loading over Oct. 1-25, and traded at a discount of 75 cents/b against the Platts front-month cash Dubai assessments in October.