Middle East crude futures spreads steady ahead of Oct trading

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Benchmark Dubai crude futures spreads were steady in mid-morning trade on Tuesday when markets opened after a long weekend in Singapore, as traders wait for cues for October-loading barrels of Middle East sour crude.

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The October Brent/Dubai Exchange Futures for Swaps spread, or the EFS, narrowed a touch to $2.39/b as of 11 am in Singapore on Tuesday (0300 GMT). It had been assessed at $2.41/b late Thursday August 8 when markets closed for the week, at 4:30 pm in Singapore (0830 GMT).

Intermonth spreads for Dubai crude held in place Tuesday morning, ahead of results from Iraq’s Basrah crude tender issued by SOMO last week. Market participants will be on the lookout for tender results to get a sense of direction for medium and heavy sour crude differentials, they told S&P Global Platts.

The September/October Dubai futures spread stood at 86 cents/b as of 11 am in Singapore on Tuesday, same as last assessed on Thursday, August 8.

The October/November spread was a tad wider than its last assessed value of 63 cents/b. At 11 am in Singapore, it was notionally assessed at 65 cents/b.

Several buy and sell spot tenders for Middle East crude are expected to be issued and concluded within this week, which will give traders in Asia a better idea of how the sour crude market will shape up over August.

Qatar Petroleum’s Al-Shaheen tender is also expected in the first half of this week. The tender is keenly watched each month, as it can help traders assess buyer sentiment for medium sour crudes similar to Dubai and Oman.

Last month, QP sold two 500,000-barrel cargoes of Al-Shaheen crude to unnamed buyers at premiums averaging around $1.80/b over Platts front-month Dubai crude assessments.

The Platts Dubai spread between Month 1 and Month 3 averaged $1.37/b that week.

The Dubai Month 1/Month 3 spread stood at $1.75/b Tuesday morning, unchanged from Thursday’s assessment.

–Eesha Muneeb, eesha.muneeb@spglobal.com

–Edited by Norazlina Juma’at, norazlina.jumaat@spglobal.com