Asia oil/products: Dubai trades above $70/b, cracks fuel oil/naphtha rise
London (Quantum Commodity Intelligence) – The Middle East Dubai crude oil benchmark traded above $70/b Friday for the first time since May 2019, as upbeat sentiment continues to propel global crude prices upwards.
Dubai cash for August delivery was assessed at $70.09/b on June 4 (1630 Singapore time), up $0.14/b from Thursday's Singapore close, while DME Oman futures for August settled $70.38/b at the Asia close, up 0.24/b.
The relatively small hikes to July OSPs on key Saudi grades (up $0.10-$0.20/b) is likely to support buying interest as Asian refiners look to restock falling inventories.
But differentials continue to move higher with the Dubai cash vs Dubai swap (M1-M3 cash equivalent) widened out to around $1.70/b, putting spot Oman at close to Dubai swaps +$2.00/b.
Cash Brent (BFOE) for August was assessed at $71.75/b, up $0.08/b from Thursday's Asian close, while August Brent/Dubai narrowed further to $1.66/b.
Products
Naphtha spot cracks edged higher for the ninth straight day. Firmer petrochemical demand was behind the move. One deal was heard at $638/mt CIF Japan for delivery 1H August.
Gasoline cracks for spot loading in Singapore hit a one-week high in trade on Friday, as cash differentials flatlined and paper cracks climbed a solid $0.30/b down the curve.
Spot cracks were up $0.40/b. No deals were reported, but bids were heard for 92 RON spec at $76.90/b with offers at $78.20/b for 95 RON for loading within the next 15-30 days, narrowing the differential between the two grades.
Spot jet fuel cracks slumped. One deal was heard at $0.50/b below the underlying swaps curve, where the crack also fell, tracking Europe lower on more UK travel curbs.
10ppm diesel cracks looked slightly weaker in the prompt. One deal was heard at $0.10/b below the underlying swaps curve with a second at a discount to 2H June swaps. The curve cracks flatlined.
Cracks rebounded for the seventh straight day for higher sulfur fuel oil, while marine fuel also nudged higher supported by firmer diesel.
Spot cracks for 0.5% were at $3.50/b with the cash differential to swaps marked at a $0.75/b discount. Higher sulfur cracks are at their strongest in three weeks - when talks over Iranian supply began.
