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Dubai crude complex firms on robust demand for Q1 2020

Benchmark Dubai crude future spreads and the Brent/Dubai Exchange Futures for Swaps spread firmed slightly Wednesday morning in Asia, with traders saying they expect demand for lighter crude grades in the region to remain firm through the first quarter of 2020.

The February Brent/Dubai Exchange Futures for Swaps spread narrowed Wednesday morning in Asia as sentiment started taking shape for the February trading cycle for Middle East crudes following the release of Saudi Aramco’s official selling prices at the start of the week.

While other major producers are yet to issue their OSPs for the current cycle, the Saudi OSP release provides market participants in Asia with a clue for what to expect in terms of pricing, as well as a headstart in evaluating various crude grade refinery yields for the month ahead.

The Brent/Dubai EFS was pegged at $2.62/b at 11 am Wednesday in Singapore (0300 GMT) after being assessed at $2.66/b Tuesday at 4:30 pm Singapore time (0830 GMT).

A gage of spot market demand for Middle East high sulfur crudes in Asia, the EFS spread has narrowed steadily since the beginning of the week, which was also the beginning of the month and the trading cycle. It had been assessed at $2.77/b on Monday.

Meanwhile, intermonth spreads were largely steady to slightly firmer midweek. The January/February spread was pegged at 87 cents/b at 11 am Wednesday after being assessed at 84 cents/b Tuesday at the close of trading in Asia.

The February/March spread was largely unchanged over the same period, pegged at 66 cents/b at 11 am Wednesday after being assessed at 67 cents/b Tuesday.
Source: Platts

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