Asia oil/products: Crude price edge up, high sulfur diesel rises

Quantum Commodity Intelligence - Middle East crude prices Wednesday posted a small gain for the first time in a week, while higher sulfur diesel cargo prices continued to rise amid firm demand. 

Dubai cash for November delivery was assessed at $84.65/b for 28 September (1630 Singapore time), $0.45/b higher on the day, while DME Oman futures were down $0.53/b at $83.74/b ahead of the Nov22 contract expiry.

A less lively Dubai partials window saw just one convergence, with Reliance nominating Upper Zakum to Gunvor, taking the monthly total up to 10 cargoes of 500,000 barrels each.

Asian markets were seen stabilizing amid reports that Chinese demand will pick up for December as export quotas for refined products are increased, but Middle East sellers are expected to face continued competition from Russia.

Medium sour grades, such as Oman, Upper Zakum and Al Shaheen, were valued at Dubai swaps +$4.50-$4.60/b for November, with December barrels notionally pegged at +$4.60/b.

ICE Brent futures for Nov22 were valued at $85.80/b at 1630 Singapore, up $0.38/b from the previous Asia close, keeping the Nov22 Brent/Dubai steady at +$1.15/b. The Nov22 EFS rebounded around $0.60/b to around $5.70/b at the Asian market-on-close, while Dec22 was pegged at $6.50/b. Murban partials were offered and traded at $85.50/b, around $1.20/b under IFAD Murban futures.

Products

In the naphtha cash market, BP remained the sole buyer through the window as it lifted its bids for cargoes shipping in the 2H November laycan to $647/mt CFR Japan without finding any selling interest. That meant the flat price was $5/mt higher at $646/mt, with the spot crack to Brent back up as it climbed $4.56/mt to +$26.83/mt.

Gasoline cash markets were again quiet, with Trafigura, Vitol and Unipec the sole participants in Wednesday's window. Both sides of the 92 RON market were represented but values along the cash curve remained far apart. That left move in the 92 RON paper market to lift the flat price a slim $0.21/b to $87.71/b, with the crack to Brent edging $0.15/b higher to +$3.24/b.

Jet cash market positioning heading into the month end was again thin, although paper markets were well defined and clear structure to Quantum's assessments. The Oct/Nov spread traded and widened to $1.65/b from $1.40/b on Tuesday, with the November swap booked by Aramco and DV Trading at $107.30/b. Those moves left the cargo price assessed $0.58/b higher at $108.88/b, with the spot crack to Brent up $0.52/b at $24.41/b.

Diesel action was yet again on the higher sulfur cargoes, with the 0.25% market bid up through the window by Vitol without finding any selling interest. Quantum's 0.25% cash differential assessment jumped $0.80/b and flipped into a premium to the curve for the first time in months as it priced at $0.11/b FOB Singapore. The jump in 500ppm as Vitol's bids again lifted the market out of a discount to the curve was even greater, rising $0.90/b to $0.71/b. Total was as sole bidder in the 10ppm market as it sought cargoes loading 21-28 October at just $0.80/b with no sell-side interest. In a busy paper window, Wednesday's moves meant 10ppm was up $1.40/b at $118.64/b, with 500ppm up $2.40/b at $117.73/b, and 0.25% up $2.20/b at $117.13/b. The 10ppm crack to Brent was up $1.34/b to +$34.17/b.

The marine fuel 0.5% sulfur cash market saw Maersk, Shell, and Vitol on the sell-side against BP looking for a cargo for shipment 15-19 October. BP's bid, when adjusted for market structure, was enough to nudge the front end of the physical curve higher and add $0.92/mt onto Quantum's cash assessment as it hit $16.20/mt FOB Singapore. Higher swaps meant the outright was marked $5.70/mt higher at $631.53/mt, with the spot crack to Brent up $0.77/b to +$7.06/mt.

In a slow day for the high sulfur fuel oil market, Vitol offered 380 CST cargoes along the strip at a $1/mt FOB Singapore to swaps and a sole 180 CST for loading 23-27 October at a $5/mt premium. With no buy-side interest and the offers on show too high to touch where Quantum's cash assessment sat, moves in a well-defined paper market weighed slightly on outright prices – with 180 CST down $2.09/mt to $386.96/mt and 380 CST down $1.15/mt to $349.93/mt.