Asia oil/products: Dubai structure holds firm, refined product cracks mostly weaker
London (Quantum Commodity Intelligence) –Middle East crude prices consolidated at the $70/b mark Monday, as market sentiment remained upbeat ahead of this week's final round of talks prior to Iran's elections.
Dubai cash for August delivery was assessed at $70.00/b on June 7 (1630 Singapore time), down $0.09/b from Friday's close, while DME Oman futures for August settled $70.35/b at the Asia close, down 0.03/b.
The Dubai structure also consolidated at the steepest backwardation since January 2020, with the Aug/Sep at around $1/b and Sep/Oct at over $0.70/b.
This is turn helped push the Brent/Dubai August EFS tot $3.30-$3.35/b for the last four sessions, compared to around $2.90/b on the July EFS at the end of May.
Cash Brent (BFOE) for August was assessed at $71.75/b, down $0.20/b from the Friday's Asian close, while August Brent/Dubai narrowed further to $1.55/b.
Products
Fuel oil spot cracks dropped ahead of the Iran talks, halting a seven day upward trend to leave cracks on Monday broadly where they were last week, distillates were marginally lower and remain holed at relatively weak levels at just below $6/b for 10ppm diesel and around the $4/b mark for jet kero, while gasoline and naphtha cracks firmed marginally on the day.
Naphtha cracks crept higher again, with the front month pegged at $102.44/mt, the highest level since late March. No physical deals were heard.
Gasoline front month paper cracks weakened $0.17/b to $6.22/b, the lowest levels since the end of April on thin trade and as India starts to slowly unlock. Cash differentials were marked at -$0.40/b under swaps and the 92 RON spot price was pegged at $76.77/b. The structure remains unchanged – backwardated.
Jet kero cracks weakened and the contango steepened slightly, indicating a weaker market despite rising European flight numbers. No deals were heard and the July and August contango widened to -$0.30/b from -$0.25/b with the spot crack weakening to $2.70/b – the lowest since the end of April.
In the diesel market, two trades were heard for 10ppm, putting spot at a $0.10/b discount to the underlying futures, leaving spot at a flat price of $77.43/b, down $0.30/b on the day. The spot crack was $0.09/b weaker at $5.90/b with July cracks at $6.37/b. The complex was broadly unchanged.
Front month paper fuel oil cracks slipped for the first session in seven, with high sulfur falling $0.39/b to -$8.33/b and 0.5% slipping $0.28/b to $3.33/b on a 6.9 density. No physical deals were heard and cracks now hovering around Thursday's levels. The front month swap between the two stands at $118.50/mt versus $118/mt on Friday. HSF0 380cst was pegged at $396/mt for spot tonnes and 0.5% at $516.50/mt.
