Dubai futures intermonth spreads steady at 2-week high on demand from China

Singapore — Dubai crude futures intermonth spreads were mostly steady in mid-morning trade in Asia Oct. 15 from the month-to-date high touched the previous session as demand emerged from China.

At 11 am in Singapore (0300 GMT), the November/December Dubai crude futures spread was pegged at a contango of 19 cents/b, up 1 cent/b from the 4:30 pm Singapore close (0830 GMT) on Oct. 14, S&P Global Platts data showed.

The December/January intermonth spread was pegged at 22 cents/b, also up 1 cent over the same period.

The spreads had jumped 9 cents/b and 5 cents/b respectively on Oct. 14 to the highest levels since Sept. 30 and Sept. 29, Platts data showed.

Similarly in the physical market, the December cash Dubai versus same-month Dubai futures spread, or M1/M3 spread, was assessed up 21.5 cents/b day on day at minus 54 cents/b at the Asian close Oct. 14, the highest since Sept. 29 when it was assessed at minus 47 cents/b, Platts data showed.

The narrowing in the contango structure for Dubai comes amid improved sentiment in the Middle East sour crude market following the emergence of demand from Chinese refiner Rongsheng, which was heard to have purchased around 8 million barrels of medium sour crude barrels from the Middle East.

However, it remains to be seen if similar demand will emerge from other Asian refiners, market participants said.

"Other Chinese independent refiners haven't received [crude oil import] quota [for 2021]. Only Rongsheng is buying so far... no one else," a North Asian crude trader said.

Market participants were also awaiting the outcome of Qatar's Al-Shaheen crude oil tender, which could provide further cues on Asian refiners' appetite for December-loading barrels. "It will be known later today," a Singapore-based crude trader said Oct. 15.