Dubai crude extends overnight climb as buy-side inquiries emerge
http://www.chemnet.com Dec 12,2019
The prompt intermonth spread for benchmark Dubai crude futures widened in mid-morning trade in Asia Thursday, extending an overnight rally in the Dubai M1/M3 structure after buyer inquiries for Middle East spot crude cargoes started to emerge during the latter half of this week.
The prompt January/February Dubai futures spread widened to be pegged at $1.13/b at 11 am in Singapore (0300 GMT). It was assessed at $1.09/b at the 4:30 pm (0830 GMT) close of trading in Asia on Wednesday.
The Dubai M1/M3 spread -- a gauge for spot market sentiment of Middle East crude -- was notionally pegged at $2.79/b Thursday morning.
The spread had rallied at the end of Platts Market on Close assessment process on Wednesday by 20 cents/b from Tuesday, and was assessed at $2.75/b at 4:30 pm in Singapore.
Crude market participants reported fresh inquiries from buyers in Asia, especially for lighter crude grades such as Abu Dhabi's Murban and Umm Lulu.
Sellers seemed confident of fetching premiums similar to spot market levels in November for their cargoes in the current month.
Information trickling in on Thursday morning showed that some preliminary Murban deals could have been concluded at levels near to, or higher than those done in November, but details are still emerging.
Refiners are expected to have concluded their buying requirement and crude valuations for the current cycle Thursday, and will either make direct private inquiries with sellers or post buy side tenders in the coming days, traders said.
Meanwhile, the rest of the Middle East sour crude complex looked relatively steady compared with Wednesday's assessed levels.
The February/March Dubai futures spread was pegged at 77 cents/b Thursday morning, compared with 76 cents/b assessed Wednesday evening.
Similarly, the February Brent/Dubai Exchange of Futures for Swaps spread was pegged at $2.88/b Thursday at 11 am.
It was assessed at $2.87/b on Wednesday at 4:30 pm in Singapore.