Asia oil/products: Dubai crude at fresh two-year highs, cracks broadly stable
London (Quantum Commodity Intelligence) – Middle East crude oil prices surged to fresh post-pandemic highs Thursday, as the crude market shrugged off COVID-19 concerns in Asia and followed the broader global trend.
Dubai cash for August delivery was assessed at $69.95/b on June 3 (1630 Singapore time), up $0.78/b from Wednesday's Singapore close, while DME Oman futures for August settled $70.14/b at the Asia close, up $0.68/b.
Both markers registered the highest level since May 2019.
Saudi Aramco issued its Asia OSPs for July vs Dubai/Oman with key grades mostly higher.
Arab Ext Light for July was set at Dubai/Oman +$1.90/b (+$0.40 from June), Arab Light +$1.90/b (+$0.20), Arab Medium +$1.35/b (+$0.10) and Arab Heavy +$0.40/b (-$0.10)
The Middle East spot market is expected to start trading next week.
Cash Brent (BFOE) for August was assessed at $71.67/b, up $0.79/b from Wednesday's Asian close, while August Brent/Dubai was little changed at $1.72/b.
Light sweet crudes in Asia were trading at higher premiums at the start of June, partly on the wider Brent/Dubai EFS, but also as refiners chase distillate- and gasoline-rich grades in anticipation of firmer demand later in the year.
Products
Spot cracks edged higher in line with the percentage increase in crude, with cash differentials for low sulfur marine fuel narrowing closer toward parity and higher sulfur widening on limited demand.
Light end stocks were up marginally on the week in Singapore, and cracks were a slither higher despite that dynamic.
RON 92 gasoline was assessed at $74.04 FOB Singapore on notionally firmer cash differentials, pushing up the crack to $4.75/b. The market remains structurally weak nearby though, with spot valued at $0.46/b below front month July swaps.
The draw in Japan continued to underpin the relative value of naphtha to crude, with the front month crack firming slightly to $100/mt CIF Japan versus cash Brent. No spot deals were heard and premiums were rolled forward.
Distillate cracks were broadly stable despite an 8% draw in stocks at Singapore.
Two 10ppm diesel transactions were heard for spot loading at -$0.10 and -$0.15 FOB Singapore below the underlying swaps curve, making spot and front month cracks marginally firmer.
Spot prices for 10ppm were marked at $77.60/b, flat to the front month swap.
No deals were heard for jet and the swaps curve moved broadly in line with crude.
Two high sulfur transactions were heard with HSFO 380cst 3.5% marked at a $3/mt discount to the curve, largely on the back of a big build in stocks at Singapore. The crack though, remains firm, due to demand further out on the curve.
Sources, however, said marine fuel 0.5% was $2/mt more expensive at a $1/mt discount.
