Asia oil/products: Dubai posts further gains, weighs on cracks

Quantum Commodity Intelligence - Middle East crude prices continued to recover on Monday, with the moves weighing on middle distillate cracks.

Dubai cash for November delivery was assessed at $92.36/b for 12 September (1630 Singapore time), $1.96/b higher on the day, while DME Oman futures were up $2.01/b at $92.35/b for the Nov22 contract.

Dubai partials were heard bid at $92.35/b, while Oman partials were bid $0.05/b higher, with little to differentiate the medium sour grades once again, also including Upper Zakum and Al Shaheen.

Qatar is expected to offer out its monthly Al Shaheen this week, likely three cargoes, with the grade currently valued at Dubai swaps +$5.40-$5.60/b, depending on loading dates.

Refiners are expected to take full term volumes from NOCs in October, after the steep cuts in differentials, including Saudi Aramco and Iraq.

Murban partials traded at $93.60/b, a comfortable premium to Brent, but $0.60/b under the IFAD Murban futures settlement of $94.20/b.

ICE Brent futures for Nov22 were valued at $92.78/b at 1630pm Singapore, up $2.45/b from the previous Asia close as the Nov22 Brent/Dubai spread once again flipped, valued at $0.42/b. The Nov22 EFS was slightly higher, trading around $5.80/b at the Asian market-on-close.

Products

BP raised its bids for naphtha cargoes shipping in the 1H November laycan through the window to $653/mt CFR Japan, with the final bid hit by Equinor and taken as value for the date. That shaved some value off where Quantum saw the cash market, but moves in the paper trade helped to lift the outright $9.50/mt to $654.25/mt. The spot crack versus Brent was down $8.16/mt to -$23.04/mt.

Gasoline trades were booked in the 92 RON, with PTT selling a cargo to Unipec at $99.60/b FOB Singapore for loading 27 September-1 October and Trafigura buying from Vitol at PTT at $99.40-$99.50/b for 3-7 October. That lifted the cash assessment and gave a flat price that was up $2.57/b at $99.22/b. The spot crack for 92 RON to Brent continued to creep higher, gaining another $0.16/b to hit a one-week high of +$6.82/b. For 95 RON, an offer for a cargo loading 2-6 October at $103.80/b weighed slightly on the cash assessment and gave an outright price that was up $2.24/b at $103.79/b and left the crack down $0.17/b at +$11.39/b.

Jet activity continued to pick up from its summer lows, with both sides of the market represented at the start of the week as Aramco and Unipec offering cargoes for loading 15-20 days ahead. The former was equivalent to $130.23/b, while a bid from PetroChina for similar load dates at $129.81/b was seen. Aramco's offer weighed on the cash differential assessment, with another offer for a cargo loading 20-25 days out from them confirming an unchanged structure to the physical market. The assessment was lowered $0.39/b to $2.09/b, which gave a flat price up $0.91/b at $129.74/b. The spot crack to Brent fell $1.50/b to a two-week low of +$37.34/b.

Diesel cracks continued to ease as plenty of interest in the cash market failed to result in any fresh trading activity at the start of the week. In the cash market, an offer from BP at the front of the cash window and a bid from Vitol at the back combined to flatten the physical curve, which shaved a penny from Quantum's cash differential assessment. As a result, the 10ppm flat price was assessed $1.20/b higher than Friday at $138.91/b, while the spot crack to Brent was down for a second consecutive session as it lost $1.21/b to +$46.51/b.

Marine fuel 0.5% sulfur saw Trafigura as the sole participant during the Platts window at the start of the week, offering cargoes for delivery 15-20 days ahead down to a $5/mt FOB Singapore premium and for 20-25 days ahead down to $7/mt. That was well off where cash differential slipped to last week, with the assessment left steady from Friday as moves in the swaps market left the outright price up $17.30/mt at $655.68/mt. The spot crack to Brent was up $0.10/b at +$2.63/b.

High sulfur fuel oil trades were booked for two 380 CST cargoes loading 15-20 days ahead at a $383/mt FOB Singapore outright and as a $4/mt discount to the swaps curve, which priced similarly and weighed on Quantum's cash assessment as it fell $2.69/mt to -$3.69/mt. That gave a flat price up $12.69/mt at $384.25/mt. Activity was more subdued in the 180 CST after last week's cash rally, with a sole bid from Vitol for a cargo loading 15-20 days ahead heard at a $1/mt discount to swaps. A cargo in floating storage was offered by Alvari for similar load dates at a $6/mt premium to swaps, which weighed on the front end of Quantum's cash assessment and left the flat price up $9.56/mt at $426.25/mt.