Dubai crude steady on month, Saudi OSPs seen slightly lower
Quantum Commodity Intelligence - The October monthly average price for benchmark Middle East Dubai crude was little changed versus the previous month, according to Quantum data, as prices stabilised following three months of consecutive losses.
Quantum's monthly average price for December-loading Dubai was $91.13/b, or a marginal gain of 0.25%. That compares with $90.91/b for November-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 10 October as prices rallied sharply in the early part of the month after OPEC+ announced a headline cut of 2 million barrels per day.
But markets quickly reversed as the soaring US dollar and demand-growth fears amid a rash of demand forecast downgrades by several agencies, including OPEC, the IEA and the EIA.
The monthly low of $85.75/b came on 19 October, as weak economic indicators from the US, Asia and Europe all weighed on the oil sector.
However, sentiment improved towards the end of the month after figures showed strong US oil exports, while concerns were raised again over a winter diesel squeeze. EIA figures revealed US crude oil and refined products exports surged the week ending 21 October to a new record of 11.4 million bpd, including 5 million bpd of crude.
Compared to the December contract traded in the same month last year, the monthly average is up over $9.50/b from $81.59/b, or around 11.5%.
Structure
Meanwhile, the key M1/M3 Dubai cash spread, closely monitored by Saudi Aramco and other Middle East National Oil Companies (NOCs), averaged $4.75/b in October compared to $5.36/b in September, flagging a likely cut in Official Selling Prices (OSPs) for December-loading barrels by Saudi Aramco and other regional producers.
Medium sour grades such as Oman, Upper Zakum and Al Shaheen were changing hands at Dubai swaps plus $4-$5/b during the second half of October, with flagship Saudi Arab Light seen potentially set slightly above that range when the OSPs are released later this week.
Asia cash December Brent averaged $93.26/b over the month based on the 430pm Asia close, up 2.3% from the Nov22 average of $91.15/b, while the Brent/Dubai cash spread widened to an average of $2.13/b, compared to the Nov22 contract average of $0.24/b.
The spread widened to the highest level in 18 months over warnings of a winter supply squeeze in Europe once further Russian sanctions set in.
US WTI for Dec22 averaged $86.10/b based on the 430pm Singapore marker price, up from $83.76/b the previous month, as light sweet crudes outpaced medium sour grades such as Dubai and Oman.
For a full Dubai and crude oil pricing history, visit Quantum's pricing pages.
