Asia oil/products: Dubai crude edges higher, marine fuel crack slides

Quantum Commodity Intelligence - Asian crude prices opened the week slightly higher as focus turned to Wednesday's OPEC+ meeting, while marine fuel continued to fall as refining margins slipped to a fresh six-month low.

Dubai cash for October delivery was assessed at $101.50/b for 1 August (1630 Singapore time), up $0.69/b from the previous session, while DME Oman futures for the Oct22 contract were up $0.45/b at $101.59/b.

Middle East spot markets are expected to be on hold ahead of Wednesday's OPEC+ meeting, but premiums for medium sour Middle East grades for the fourth quarter trading cycle were seen slightly lower, reflecting the narrower backwardation.

Asian refiners were heard taking full allocations of ADNOC crude in October, reflecting keen demand, along with Abu Dhabi's output growth as one of a handful of global producers still in a position to bolster output this year.

ICE Brent futures for Oct22 were assessed at $102.70/b at the Singapore 1630 close, down $0.57/b from the previous Asian close. The October Brent/Dubai cash spread crunched more than $1/b on the day to $1.20/b, while the October Brent/Dubai EFS was heard trading around $8.50/b.

Products

Naphtha had only Total seen in the cash market, offering 2H September down to $755/mt and 1H October to $757/mt. Moves in the paper market left the flat price down $10.25/mt at $752/mt CFR Japan, with the spot crack to Brent falling $5.34/mt to -$0.06/mt.

Gasoline had a 92 RON cargo booked as Trafigura hit a bid from PetroChina at a $1.60/b FOB Singapore premium to the curve, with the market structure assessed unchanged from Friday. That meant the flat price was marked $2.64/b lower day-on-day at $112.58/b, with the spot crack to Brent down $1.97/b at +$9.98/b.

The jet cash market was again quiet with no fresh bids or offers heard, while moves in the swaps market meant a big drop in outright prices – falling $5.04/b from Friday to $129.67/b. The spot crack to Brent was down $4.37/b at +$27.07/b.

Diesel cash differentials rose at the start of the week, with a 10ppm cargo bid from Total for loading 15-20 days ahead slightly lifting Quantum's cash assessment. Up $0.08/b from Friday at $1.45/b FOB Singapore, that was not enough to offset a big downward move in the paper market, which left the physical price down $4.62/b at $137.95/b while the spot crack to Brent lost $3.95/b to +$35.35/b.

Marine fuel 0.5% sulfur slipped as the monthly calendar roll and recent supply trends cut $38.63/b from the spot assessment to $769.27/b. That meant the crack to Brent fell another $4.93/b to hit a six-month low of +$8.89/b. In the cash market, a series of lower offers along the strip from Trafigura pressured the cash differential further, with Quantum assessing value down $2/mt from Friday at $44/mt FOB Singapore.

High sulfur fuel oil continued to gain ground, with bids from Vitol lifting the 180 CST cash assessment $3/mt from Friday to $4/b FOB Singapore. The 380 CST gained a slimmer $0.20/mt to hit $6.15/mt as PetroChina lifted the market along the curve. Those moves meant 180 CST was assessed $9.47/mt higher at $521.35/mt, while 380 CST was up $4.61/mt at $484.75/mt.