Dubai crude rebounds 5% on week amid upbeat China outlook
Quantum Commodity Intelligence - Middle East benchmark Dubai crude registered gains of nearly 5% on the week, largely reversing losses from the previous week as sentiment again shifted back to positive mode on growing optimism over China.
Quantum assessed front-month Dubai cash for April delivery at $83.55/b in the week ending 10 February versus $79.77/b for the same contract the previous week Friday, as crude prices hit February highs after Asian markets closed Friday on news that Russia would unilaterally cut output.
The week started on a firm footing after IEA chief Fatih Birol reiterated comments that producers might need to revise output upwards to meet growing demand from China.
"This may be even stronger if the Chinese economy advances stronger than we assume," said Birol on Monday
OPEC voices have also been more positive the past week, including Secretary General Haitham Al Ghais, who gave an upbeat outlook for global oil markets at India Energy Week.
Al Ghais said that he sees "potential for demand uptick" in the oil markets led by the Chinese demand resurgence, as OPEC remains cautiously optimistic in the near term.
Saudi Energy Minister Prince Abdulaziz bin Salman also warned that sanctions and underinvestment in the energy sector could result in a shortage of energy supplies.
Global prices were also boosted this week after crude exports from the key export hub of Ceyhan were suspended following two devastating earthquakes in Turkey, while BP Azerbaijan declared force majeure on loadings from the Mediterranean port.
Physical
The growing sense of optimism was highlighted as Saudi lifted OSPs on most grades to Asia - whereas forecasts had called for a small drop - although last month's firm refining margins likely helped the decision.
Middle East producers also shrugged off the threat of discounted Urals and Iranian barrels into Asia, with producers confident that rising demand will absorb additional supplies.
Premiums for physical barrels were also seen picking up after reaching the lowest levels since 2021 last month. April-loading cargoes of Oman, Upper Zakum and Al Shaheen were all quoted at Dubai swaps +$2/b or above on Friday, according to Quantum data.
The prompt Dubai structure strengthened as the M1/M3 (Apr23/Jun23), used by National Oil Companies in OSP calculations, was assessed at $2.23/b Friday and up over $0.30/b versus the same spread last week.
ICE Brent futures for Apr23 were trading at $85.40/b at the Asia close Friday (1630 Singapore), up $3.48/b on the week, or 4.25%. The Apr23 Brent/Dubai cash spread narrowed from $2.15/b to $1.85/b, as lighter barrels were again hit by an increase in US sales into Asia along with weaker distillate and gasoline cracks.
DME Oman futures at 1630 Singapore were 5.05% higher at $83.64/b for the Apr23 contract, as Oman futures largely matched cash Dubai over the week.
Light sweet Murban crude futures trading on Abu Dhabi's IFAD Exchange gained 4.6% to end the Singapore week at $84.44/b for the Apr23 contract.
