Asia crude/products: Dubai crude at post-pandemic high, fuel cracks rally
London (Quantum Commodity Intelligence) – Middle East crude oil prices raced to post-pandemic highs, as Asia shrugged off lockdown concerns to focus on growing optimism on global demand growth.
Dubai cash for August delivery was assessed at $69.05/b on June 1 (1630 Singapore time), up $1.25/b from Monday's Singapore close, while DME Oman futures for August settled $69.15/b at the Asia close, also up $1.25/b.
Both benchmarks registered the highest levels since January 2020.
The Aug/Sep Dubai cash spread widened by $0.25/b on the day to $0.95/b, on expectations that August-loading barrels will be relatively tight.
Premiums for medium sour grades such as Oman or Upper Zakum were valued at Dubai swaps +$1.70-$1.80/b, although the spot market is unlikely to trade until Saudi OSPs are released later in the week.
Cash Brent (BFOE) for August was assessed at $70.72/b, up $0.93/b from the Monday's Asian close, as the August Brent/Dubai cash narrowed by around $0.30/b to $1.67/b with Dubai outpacing Brent.
Products
The story of the day for products cracks was the $2/b rally in marine fuel cracks in Singapore, reversing three weeks of losses.
Strong demand in the physical markets pushed the swaps markets higher, with cash differentials now talked at around $2/mt. With 0.5% swaps surging on stronger diesel, spot cracks rose to $3.41/b from $1.39/b a day earlier, with spot prices assessed at $511.50/mt
Elsewhere, in gasoline, no deals were reported and the cash differential of -$0.30/b was rolled forward. With swaps lagging crude slightly, gasoline cracks fell for the second straight day for June, and were broadly flat for spot. Spot price for 92 RON was assessed at $75.40/b FOB Singapore.
One trade was heard at $523/mt for naphtha, which saw spot cracks move higher and front month ease slightly on the day.
Jet cracks rebounded to a one-week high of $4.09/b as air travel picks up in Europe and the US. No deals were reported.
Tuesday was a quiet day in the diesel market with no physical deals reported. Cracks for 10ppm rose to a four-day high.
