Brent/Dubai spread moves above $3/b, refining margins hit by covid
London (Quantum Commodity Intelligence) – Middle East crude oil prices resumed the downwards trend Monday as the soaring numbers of COVID-19 cases in India continued to dampen demand outlook for Middle East crude, as benchmark Dubai prices dropped to its lowest level versus Brent for year.
Dubai cash for June delivery was assessed at $62.35/b on April 26 (16.30 Singapore time), down $0.55/b from Friday's Singapore close, while DME Oman futures for June settled $62.66/b at the Asian close, down $0.56/b. Both markets were at a two-week low.
However, cash Brent (BFOE) was only $0.14/b lower from Friday's Singapore close at $65.39/b, sending the cash Brent/Dubai spread above $3/b for the first tome since April 2020, while the June Brent/Dubai EFS hit a fresh 17-month highs of $3.74/b.
The strength of the Brent market has so far not given any uplift for the Middle East's main light sweet grade, Murban, which is trading around $2.50/b discount to Brent for June.
Products
Most products were weaker against cash Brent on Monday with the wider Dubai/Brent spread pressuring cracks.
Naphtha margins down the curve rebounded, with May swaps versus July cash Brent rising above $85/mt for the first time in a week.
Spot margins were marked at $83/mt amid the expectation that crackers will return.
Spot gasoline margins fell around $0.50/b on the day versus July Brent with one physical deal pointing to lower spot demand.
One spot deal was heard at $73.20/b FOB Singapore for nearby loading pushing the RON 95 spot crack down to $7.76/b from $8.53/b a day earlier.
No spot deals were heard in the jet kero market and cracks weakened slightly alongside other distillates.
One gasoil deal was heard at H1 May swaps -$0.15/b, indicating improving demand on the spot market versus swaps.
On that basis the crack flatlined at $3.63/b versus the curve falling around $0.15/b.
Five deals were heard for fuel oil basis FOB Singapore at $1/bl for 380cst and $1-1.50/mt for 180cst.
On a flat price basis that was a fall of $4-4.25/mt on the day to $374/mt for 380cst and $369/mt for 180cst.
No marine fuel 0.5% deals were heard and spot assessments tracked the swaps, which outpaced the fall in crude.