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DUBAI FUTURES: Sour crude tracks sideways as OPEC flails around meeting date

Singapore — Sour crude oil spreads narrowed a tad in mid-morning trade in Asia Tuesday, staying in a tight range, as the Middle East market watched OPEC rhetoric for cues to extending supply cuts.

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The Brent/Dubai Exchange of Futures for Swaps spread retraced its steps from Monday's rise to $3.46/b, sliding down to $3.36/b at 11 am in Singapore (0300 GMT) on Tuesday.

Backwardation in both the Brent and Dubai structures slackened Tuesday morning, after having strengthened Monday as markets evaluated conflict risks in the Strait of Hormuz off the Persian Gulf.

However, focus has now turned to the upcoming OPEC meeting, for which no date has been agreed on as yet.

August/September ICE Brent futures slid past $1-plus backwardation on Monday to 97 cents/b at 0300 GMT Tuesday, while the same spread for Dubai swaps fell to 46 cents/b, compared to 51 cents/b at the close of Asian trading Monday at 0830 GMT.

With less than two weeks before OPEC's production cuts are set to expire, the producer group and its allies appear no closer to choosing when their next meeting will be.

Many analysts expect the group to extend the 1.2 million b/d production cuts -- if OPEC, Russia and nine other partners can agree on a date to decide.

Any date change for the OPEC meeting would require unanimous approval by its 14 members. Several OPEC delegates said news reports of Iranian oil minister Bijan Zanganeh's suggested date were the first they had heard of that proposal.

OPEC and its 10 non-OPEC allies in December agreed to cut 1.2 million b/d for the first half of 2019 to prop up prices and induce draws of oil from storage.

Meanwhile, in Asia, the Platts crude Market on Close assessment process saw its sixth full Murban cargo change hands during Asian trading hours Monday, in addition to the 10th convergence declared for Dubai partials in June.

PetroChina bid for a 500,000-barrel clip of light sour Murban crude for August loading on an OSP basis, and Totsa sold the cargo at a premium of 5 cents/b to the OSP.

This is the sixth Murban crude cargo to be sold as a full 500,000-barrel clip via the MOC in June, also making it the most number of full Murban cargoes seen traded in the Platts MOC in Asia ever.

Platts assessed August Murban at $61.55/b, and at a premium of 5 cents/b versus its OSP on Monday.

Prior to Monday, all Murban cargoes traded in the MOC have been purchased by Shell.

Shell has also been the recipient of all crude cargoes declared via the convergence of Dubai partials traded in the Platts crude MOC this month.

So far, all cargoes declared for the August Dubai convergences have been Abu Dhabi's Upper Zakum grade.

A total of 17 crude cargoes -- 8.5 million barrels -- have changed hands in the MOC this month as a result of both partials convergences and full cargo deals.

Platts assessed August cash Dubai at $60.71/b Monday. As of 11 am in Singapore (0300 GMT) Tuesday, August cash Dubai was notionally assessed at $59.69/b.

--Eesha Muneeb, eesha.muneeb@spglobal.com

--Herman Wang, herman.wang@spglobal.com

--Edited by Geetha Narayanasamy, geetha.narayanasamy@spglobal.com