Dubai crude retreats 6% on month, Saudi OSPs seen little changed

Quantum Commodity Intelligence - The September monthly average price for benchmark Middle East Dubai crude retreated nearly 6% versus the previous month, according to Quantum data, as prices dropped for a third consecutive month on demand slowdown fears.

Quantum's monthly average price for November-loading Dubai was $90.91/b, or a fall of 5.88%. That compares with $96.59/b for October-loading crude and the 14-year high of $113.24/b for August-loading barrels traded during June.

The highest price of $95.34/b was registered on 5 September, while the monthly low of $84.20/b came on 27 September, which was also the lowest Quantum Dubai assessment since Russia's invasion of Ukraine in late February.

Sentiment was largely dominated by growing fears over a global recession and the impact on oil demand, with the market largely shrugging off more bullish indicators including a rise in geopolitical tension as Russia mobilized reservists and an expected OPEC+ cut when the group meets on 5 October.

On a quarterly basis, the Quantum average for Q3 was $96.68/b, versus the Q2 average of $108.22/b.

Compared to the Oct21 contract, the monthly average is up over $18/b, or 25%, from $72.71/b.

Structure

Meanwhile, the key M1/M3 Dubai cash spread, closely monitored by Saudi Aramco and other Middle East National Oil Companies (NOCs), averaged $5.36/b in September compared to $4.89/b in August, flagging a small increase in Official Selling Prices (OSPs) for November-loading barrels.

Medium sour grades such as Oman, Upper Zakum and Al Shaheen were changing hands at Dubai swaps plus $4.50-$5.50/b during the second decade of August, with flagship Saudi Arab Light seen potentially set slightly above that range when the OSPs are released next week.

Asia cash November Brent averaged $91.15/b over the month, down 6.7% from the Oct22 average of $97.70/b, while the Brent/Dubai cash spread crunched to an average of $0.24/b, compared to the Oct22 contract average of $1.12/b.

The spread has flipped between positive and negative throughout the month, leaving the narrowest Brent/Dubai spread since the height of the pandemic when Brent prices collapsed in Q2 2020.

The Brent/Dubai crunch was seen more as a symptom of Brent weakness, with North Sea marker grades facing stiff competition from WTI Midland and West African barrels.

For a full Dubai and crude oil pricing history, visit Quantum's pricing pages.