CRUDE MOC: Dubai cash/futures spread widens after Saudi hikes OSPs
The cash/futures spread for benchmark Dubai crude widened on July 6, following announcements of higher official selling prices by Saudi Aramco for the fresh trading cycle.
The spread — a key indicator of spot market sentiment for sour crude in Asia — widened to a premium of $1.07/b at the 4:30 pm (0830 GMT) Singapore close on July 6, up 6 cents/b day on day.
During the Platts Market on Close assessment process, two 25,000-barrel partials traded on July 6.
This comprised of one September Dubai partial traded between buyer Total and seller Unipec, as well as one September Oman partial traded between buyer Mercuria and seller Unipec.
The trades on July 6 brought the total number of partials traded in July so far to 12.
A wider cash/futures spread followed Saudi Aramco’s increase in its August crude export official selling prices for term crude supplies to Asia
The August official selling prices for Asia-bound grades were up by $1/b, the company said in a notice July 6.
The main driver for an increase comes from an uptick in the benchmark Dubai crude structure, reflected by the spread between physical cash Dubai and same-month Dubai futures.
The relatively mild increase is likely to come as a relief to Asian refiners after a big hike in OSPs in July and amid soft refining margins.
The Dubai cash-futures spread has also risen due to supply-side factors, with the OPEC+ alliance extending the production cut of 9.6 million b/d to July.
The spread had averaged 84 cents/b over June, up $3.57/b from the average of minus $2.73/b in May, S&P Global Platts data showed.