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Asia crude oil: Key market indicators for Sep 20-24

Crude oil futures were lower in mid-morning trade in Asia Sept. 20, weighed down by a stronger dollar and as output in the US Gulf of Mexico continued its return to normalcy, though some support was seen from falling COVID-19 case numbers in oil-consuming countries, the US and China.

ICE November Brent crude futures stood at $74.80/b as of 0300 GMT Sept. 20, down 54 cents/b (0.72%) from its Sept. 17 settlement price.

** Market participants will eye more spot tenders for November-loading Middle East crude in the week started Sept. 20, as trade activity has been minimal due to Asian buyers’ lower buying appetite, sources said.

** In the week ended Sept. 17, some Middle East grades exchanged hands via spot tenders, with Qatar Petroleum selling three November-loading cargoes of Al-Shaheen crude at an average premium of around $1.53/b-$1.55/b to Platts front-month Dubai crude assessments, sources said. Thailand’s IRPC bought 1-2 cargoes of November-loading Qatar Land crude at a discount of 10-15 cents/b to the grade’s official selling price, according to sources.

** Russia’s Surgutneftegaz sold, via tenders, six 700,000 barrel cargoes of ESPO Blend crude for November at premiums of $4.10/b-$4.50/b to Platts front-month Dubai crude assessments, sources said.

** Eyes will be on trades for Russia’s ESPO Blend crude as cash premiums surged amid an uptick in demand for November-loading barrels. Limited flow of arbitrage crude from West Africa and other regions into China may continue to support demand for ESPO Blend crude in September, sources said.

** India continued to seek more arbitrage crude, with Indian Oil Corp. having bought, via tender, 5 million barrels of various Nigerian crude grades for loading in November, sources said. Mangalore Refinery and Petrochemicals Ltd. too issued a tender seeking 1 million barrels of November-delivery crude, S&P Global Platts reported earlier. The tender closes Sept. 21.

** Dubai cash/futures (M1/M3) averaged $1.49/b in the week ended Sept. 17, against $1.45/b in the week ended Sept. 10.

** Intermonth spreads were higher during mid-morning trade Sept. 20 with November/December pegged at 80 cents/b, up 4 cents/b from the Asia close Sept. 17.

** November Brent/Dubai Exchange of Futures for Swaps was pegged at $3.77/b at mid-morning Sept. 20, up 7 cents/b from the Asia close Sept. 17.


** Market participants await Pertamina’s procurement tender results for November-arrival condensates. Rising naphtha cracks coupled with a shorter North West Shelf loading program may continue to support light sweet condensate sentiment, sources said.

** The trade details for November loading barrels of Papua New Guinea’s Kutubu Light and Australia’s Ichthys condensate and Cossack would be in focus in the week started Sept. 20, sources said.

** In Southeast Asia, traders will be looking for updates on Brunei Energy’s Kimanis tender and trading activities across the Malaysian crude grades in the Malaysian Crude Oil basket, sources said.

** Traders will watch for the tender results of PetroVietnam Oil’s Dai Hung, following stable to higher cash premiums seen for Su Tu Den and Chim Sao crude grades amid resilient gasoil and jet fuel product cracks, sources said.

** Trading in October loading barrels of Sudanese Nile Blend is likely for heavy sweet crude, sources said.

** Traders await October MCO official selling price differential around the middle of the week, sources said.


** In Asia delivered markets, an influx of WTI Midland crude into Asia has dampened regional crude sentiment, with a widening Brent-WTI spread continuing to favor arbitrage economics for US crude cargoes to Asia, sources said.

** The cash differentials for December-arrival cargoes of Brazilian Tupi crude are expected to remain firm due to tight supply amid pockets of Chinese inquiries, sources said.


** Crude prices are likely to come under pressure in the week started Sept. 20 from a stronger dollar as the US Federal Reserve inches closer to a start date for the tapering of its massive monthly asset purchases. Federal Reserve chair Jerome Powell signaled in August that it would be appropriate to taper those purchases by end-2021.

** The US dollar index rose 0.66% on the week to close at 93.19 as of Sept. 17, a high not seen since Aug. 23.

** Investors will watch the Federal Open Market Committee meeting over Sept. 21-22 for cues on the Federal Reserve’s pace of tapering.

** In the US Gulf of Mexico, less than a quarter of crude production remained offline nearly three weeks after Hurricane Ida ravaged the Louisiana Gulf Coast. About 422,078 b/d of crude, or 23.2%, remained offline Sept. 17, according to the US Bureau of Safety and Environmental Enforcement, after Hurricane Ida shut in 95% of production end-August.
Source: Platts

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