CRUDE MOC: Uptick in sentiment lifts cash Dubai to 5-month high over Dubai futures
Benchmark cash Dubai rose to a five-month high against Dubai futures on June 29 as sentiment in the Middle East sour crude market was lifted by Abu Dhabi term export cuts for August and a dip in Russia’s Urals crude exports.
August cash Dubai was assessed at a premium of $1.38/b over same-month Dubai futures at the 4:30 pm (0830 GMT) Singapore close on June 29, up 16 cents/b from $1.22/b assessed on June 26, S&P Global Platts data showed.
The spread, a key indicator of spot market sentiment for sour crude in Asia, was the highest since January 31 when it was assessed at $1.92/b, the data showed.
Cash Dubai has rebounded against Dubai futures in recent days amid an uptick in sentiment following reports that Russia had slashed exports of its sour Urals crude to the lowest in 10 years.
In addition, Abu Dhabi National Oil Co. informed its term buyers over the weekend that it will cut its August export volume by 5% for all four grades including Murban and Upper Zakum.
On average, the spread — also known as the Dubai M1/M3 spread — has risen to average at 82 cents/b premium for June to-date, significantly higher than the minus $2.73/b average seen over the whole month of May, Platts data showed.
The price indicator, tracked by Middle East producers to define the core direction and extent of price hikes or cuts, suggests a fresh round of official selling price increases by the regions’ producers in the coming week.
The Platts MOC assessment process in Asia on June 29 saw nine 25,000-barrel partials traded, consisting of four August Dubai partials and five August Oman partials.
In total, 93 August partials — 77 Dubai partials and 16 Oman partials — have traded for the month of June to date with no convergences yet declared.
In addition, China’s Unipec was seen purchasing a 500,000 barrel cargo of Upper Zakum, for loading August 1-25, from seller Singapore-based EXTAP (ExxonMobil Trading Asia Pacific) during the MOC process on June 29.
The cargo, which comes with a bill of lading price term, was purchased at a discount of 50 cents/b to Upper Zakum’s OSP in August.
The trade brings the total number of full cargoes of Middle East crude traded on the Asia MOC in June so far to four, consisting of three Upper Zakum cargoes and a single Murban crude cargo.