CRUDE MOC: Cash Dubai slumps to 4-month low against Dubai futures

New York — Benchmark December cash Dubai slumped to a more than four-month low against Dubai futures on Oct. 2 amid bearish sentiment on supply, while little improvement was expected in terms of the already tepid demand situation from Asian refiners.

The spread between December cash Dubai and same-month Dubai futures fell 18 cents/b day on day to be assessed at a discount of 90 cents/b at the 4:30 pm (0830 GMT) Singapore close on Oct. 2.

The spread, a key indicator of spot market sentiment for sour crude in Asia, was last lower on May 28 when it was assessed at a discount of $1.33/b, S&P Global Platts data showed.

Market participants said they expect Asian demand for December-loading Middle East crude to remain largely steady from the previous trade cycle as poor refining margins continue to cap appetite.

Oversupply concerns, meanwhile, returned amid reports of increased production by OPEC+ members such as Russia and Iraq.

The OPEC+ alliance has 2.375 million b/d of so-called "compensation cuts" due to make up for previous overproduction in violation of quotas, but not all members have submitted plans to implement the extra reductions, according to an internal document seen by S&P Global Platts this week.

This comes at a time when Libya, which is exempted from the output cuts, has more than doubled its oil production to over 250,000 b/d after the Libyan National Army lifted an oil embargo mid-September.

Meanwhile, the Platts Market on Close assessment process on Oct. 2 saw three partials traded between France's Total and China's Unipec, consisting of one Dubai partial and two Oman partials.

Each partial is 25,000 barrels in size. A convergence occurs when 20 partials are traded between two counterparties, resulting in a full 500,000 barrel physical cargo being declared from the seller to the buyer.

For Dubai partials, the seller has the option to deliver a Dubai, Oman, Upper Zakum, Al-Shaheen or, with a quality premium, Murban cargo to the buyer.

For Oman partials, the seller has the option to deliver Oman, or, with a quality premium, a Murban cargo to the buyer.