The front-month Brent/Dubai Exchange of Futures for Swaps was rangebound in midmorning Asia trade Sept. 15 as market participants eyed developments on China's plans to auction its reserve crudes later in the month.
Receive daily email alerts, subscriber notes & personalize your experience.Register Now
The November Brent/Dubai EFS was pegged at $3.40/b at 11 am Singapore time (0300 GMT), up 1 cent/b from the Asian close Sept. 14, S&P Global Platts data showed.
China's National Food and Strategic Reserves Administration will release 7.38 million barrels of crude oil from state reserves in the first set of auctions it plans to conduct Sept. 24, according to a statement posted on NFSRA's website late Sept. 14.
The crude grades to be auctioned mostly include Middle Eastern grades like Murban, Qatar Marine, Oman and Upper Zakum, as well as Forties crude.
However, the auction of the grades is unlikely to dent spot demand in the Middle East market to a great extent, sources said.
"First batch is only 7 million [barrels], so I think it is not big impact," a crude oil trader in Singapore said.
Future auction plans and volumes will, however, need to be closely watched as an increase in crude stocks being offered through such auctions could pressure the market, traders said.
"But if 2nd/3rd etc. batches follow, it [could] affect market very much," the same trader said.
In other news, Iraq's State Oil Marketing Organization issued official selling prices for October, cutting prices by $1.20-$1.50/b for all Asia-bound grades.
The move was in line with October OSPs set by Saudi Aramco, which earlier in the month slashed prices for Asian buyers, sources said.
The October-November Dubai crude futures spread was pegged at 83 cents/b, narrowing 3 cents/b from the 4:30 pm (0830 GMT) Asian market close Sept. 14.
The November-December spread was pegged at 73 cents/b, narrowing 1 cent/b from the previous day's close, Platts data showed.