CRUDE MOC: Cash Dubai/Dubai futures weaken ahead of OSPs release

Singapore — Benchmark cash Dubai weakened against Dubai futures at the Asian close on Sept. 2 ahead of the release of a fresh set of Middle East official selling prices later in the week.

November cash Dubai versus same-month Dubai futures, a key indicator of spot market sentiment for sour crude in Asia, was assessed at a discount of 37 cents/b at the 4:30 pm (0830 GMT) Singapore close on Sept. 2, down 7.5 cents/b day on day.

November cash Oman was also assessed lower at minus 27 cents/b against same-month Dubai futures on Sept. 2, which was lower compared to the 10 cents/b discount the previous day.

The spreads were lower amid some expectations that OSP price cuts this month may not be as deep as initially expected, especially for Abu Dhabi grades, after Abu Dhabi National Oil Co. announced earlier in the week that it will cut October term volumes by 30%.

"ADNOC could make smaller cuts [than initially expected]... but OSPs [in general] are hard to predict," said a Singapore-based trader.

Market participants surveyed by S&P Global Platts last week expected ADNOC to cut their October OSP differentials by a range of between 80 cents-$1.20/b while Saudi Aramco could cut their OSP differentials by between $1-$2/b.

Still, the cash spreads versus Dubai futures for September so far is higher compared to August when the Dubai spread averaged at minus 62 cents/b and Oman spread averaged minus 40 cents/b, Platts data showed.

"Demand is improving every month... India is slowly coming back," the crude trader said.

Some traders, however, have noted that lackluster refining margins could cap further increases in demand.

Second-month gasoil swap crack to Dubai swap was assessed at $4.52/b on Sept. 2, down from $4.62/b the previous day. The crack is trending lower than the $5.57/b average in August, which was itself the lowest since May 2020.

In May, the crack averaged at a 17-year low of $4.80/b, Platts data showed.