Dubai crude gains 4.5% on week, structure holds firm

Quantum Commodity Intelligence - Middle East crude oil finished the week ending 22 July 4.5% higher, posting firm gains at the start of the week as the US came away empty-handed from the high-profile visit to Saudi Arabia. 

Front-month Dubai cash for September delivery was assessed by Quantum on Friday at $102.69/b versus $98.33/b on 15 July, up 4.45%, based on the Singapore close of 1630pm.

Prices rallied early in the week after President Joe Biden's visit to the world's largest oil exporter failed to secure any commitment to a further production hike, while focus shifted to diminishing spare capacity.

However, markets levelled off at the back end of the week amid concerns over demand destruction and growing Covid cases.

The prompt Dubai structure remained resolute as the M1/M3 Sep22/Nov22, which is used by National Oil Companies in OSP calculations, held comfortably above $9/b. September premiums for flagship medium sour grades including Oman, Upper Zakum and Al Shaheen were valued at around +9.50/b above the underlying Dubai swap.

ICE Brent futures for Sep22 were pegged at $103.93/b at the Singapore close Friday (1630pm Singapore), up $4.98/b on the week, or 5%, widening the Brent/Dubai cash spread for September by around $0.60/b to $1.25/b.

The September Brent/Dubai EFS was little changed week-on-week, valued at $10.60/b Friday, but off from midweek highs of $11.50/b. 

DME Oman futures at 1630 Singapore time were 4.5% higher at $98.44/b for the Sep22 contract, again largely mirroring cash Dubai.

Light sweet Murban crude futures trading on Abu Dhabi's IFAD shrugged off continued weakness in the gasoline market, gaining 4.35% to close the week at $105.75/b, maintaining a premium over Brent of around $1.80/b.