Asia oil/products: Dubai slumps ahead of expiry, distillate cracks up

Quantum Commodity Intelligence - Asian crude tumbled sharply Wednesday with benchmark Dubai crude seen heading for a soft expiry, while middle distillate cracks continued to claw back ground lost earlier in the week.

Dubai cash for September delivery was assessed at $101.40/b for 27 July (1630 Singapore time), down $3.58/b from the previous session, while DME Oman futures for the Sept22 contract were down $1.46/b at $103.71/b.

Dubai partials came under heavy selling pressure with Totsa having to offer all the way down $101.40/b, more than $2/b under Oman futures, before finding a buyer.

Dubai also slumped versus ICE Brent futures, with the Sep22 North Sea contract at $105.51/b at the Singapore 1630 close, a fall of $1.27/b from the previous Asian close. As a result, the September Brent/Dubai cash spread rebounded to +$4.11/b, up $2.30/b on the day and the highest of the month.

The September Brent/Dubai EFS narrowed $0.14/b to $10.79/b, as the Brent/Dubai cash blowout was balanced out by the crunch in Dubai backwardation.  

Murban futures were another laggard in the crude complex Wednesday, slumping $4/b in relation to Brent futures, according to data published by ICE, although the move was seen more linked to the volatility ahead of the roll rather than a broader switch away from light-sweet grades.  

Products

Naphtha value was indicated by brokers for 2H September delivery at $747/mt CFR Japan, with 1H October heard bid at $738/mt by BP. That flattened the physical structure versus swaps and left the flat price down $22.50/mt at $747/mt. The spot crack to Brent was down $11.80/mt at +$6.38/mt.

Gasoline had a cargo of 92 RON change hands for loading 15-20 days ahead between Unipec and PetroChina at $113.20/b FOB Singapore and for 20-25 days ahead between PTT and Vitol at a $1.30/b premium to the curve. The 95 RON market was quieter, but a cargo of 97 RON traded for the first time this week at $119.50/b from Trafigura to Vitol. Those moves altered spreads slightly between the octanes, with 92 RON creeping $0.04/b higher to $113.23/b, 95 RON down $0.08/b at $116.46/b, and 97 RON up $0.21/b at $119.35/b. The 92 RON crack was up $1.50/b at a two-week high of +$12.19/b.

Jet again had little in the way of fresh buy- or sell-side interest in the cash market, but brokers indicated cargo value in Singapore at flat to swaps. Paper markets were also quiet, with spreads to moves in gasoil market taken as a guide. As a result, the outright price was marked $0.29/b higher at $130.67/b, with the spot crack to Brent up $1.75/b to +$29.63/b.

Diesel had sell-side pressure at the front end of the cash market again, with an offer for loading 15-20 days ahead for a cargo of 10ppm from Unipec flattening the nearby physical curve further. That left the cash differential down $0.13/b from Tuesday, assessed at $1.28/b FOB Singapore and meant the spot price was up $0.37/b at $138.72/b. The crack continues to creep higher from Monday's lows, gaining another $1.83/b on spot versus Brent to +$37.68/b.

The marine fuel 0.5% sulfur had BP sell cargoes to Vitol and PetroChina for the equivalent of $797/mt FOB Singapore, which was taken as value and carved another $4/mt from the Quantum cash differential. Assessed at a fresh low of $48/mt premium to swaps, the flat price was down $13.50/mt from Tuesday at $789.25/mt. With that, the spot crack to Brent was a touch lower as it lost $0.50/b to +$13.34/b.

High sulfur fuel oil saw another quiet session for the physical market, with interest only seen towards the middle and rear of the loading laycan. That left cash differentials steady from Tuesday, with moves in the paper market taking $16.25/mt off the 380 CST flat price, leaving it at $455.25/mt FOB Singapore.