Asia crude/products: Dubai crude trades higher, jet cracks

London (Quantum Commodity Intelligence) – Crude oil prices in Asia hit a 10-day high Friday, shrugging off localized supply/demand concerns and followed the broader market trend.

Dubai cash for July delivery was assessed at $67.48/b on May 28 (1630 Singapore time), up $1.11/b from Thursday's Singapore close, while DME Oman futures for July settled at $67.72/b at the Asia close, up $1.27/b.

Crude markets largely shrugged off further lockdown restrictions announced by Japan, while the lifting of Iranian sanctions has taken a back seat ahead of next week's OPEC+ meeting.

The Dubai Jul/Aug spread stabilized at around $0.30/b, having narrowed by around $0.50/b in the previous session on fears of unsold July cargoes going into the new month.

Cash Brent (BFOE) for July was assessed at $69.56/b, up $1.15/b from the Thursday's Asian close, while the July Brent/Dubai cash spread was little changed at $2.08/b.

Products

Light end and residual cracks edged higher while distillates pared back on a day when Japan announced extending its state of emergency for another 20 days to battle rising infections.

Naphtha and gasoline cracks rose marginally on the day with front-month paper cracks for naphtha at $101/mt - a three week high. One deal was heard for August loading at $612.50/mt.

A firmer gasoline complex in the US was said to be behind the move, with one 92 RON trade heard at $75.80/mt, widening the cash differential and pressuring the spot crack to $6.24/b. That highlighted short-term weakness, however, with June paper cracks rising to a one-week high of $6.37/b.

Meanwhile, spot jet cracks fell to their lowest in more than a month, with lower demand for passenger travel in the region pushing spot cracks for the 6th consecutive session. No deals were heard and cash differentials were marked at -$0.20/b.

Diesel was a similar picture. A flurry of 10ppm deals meant cash values were assessed at a $0.30/b discount to June swaps, leaving spot cracks at $5.62/b, the lowest in more than two weeks, with June paper cracks showing a similar trend.

Marine fuel cracks recovered for the second successive session on lower stocks and improving demand. The market remais weak, however, and the June/July contango widened to -$2.75/mt with cash differentials still pegged at -$3/mt.