Dubai crude up 2% in February, April Saudi OSPs seen higher
Quantum Commodity Intelligence - The February monthly average price for benchmark Middle East Dubai crude climbed by just over 2% versus the previous month, according to Quantum data Tuesday, posting gains for a second consecutive month.
Quantum's monthly average price for April-loading Dubai was $82.10/b, a gain of 2.1%. That compares with $80.38/b for March-loading crude and the 14-year high of $113.24/b for August-loading barrels traded last June.
Dubai was rangebound at $78-$85/b over the month, with a high of $84.44/b on 14 February and briefly dipping to a low of $78.30/b on 6 February.
Dubai came under pressure early in the month, registering falls of around 5% in the first week and reversing a streak of three straight weeks of gains as the new February trading cycle got off to a rocky start.
Middle East medium sour grades faced stiff competition from sharply discounted – but similar quality – Russian Urals, primarily landing in India, although Chinese refiners were also heard in the market for the medium sour grade.
Sentiment improved after IEA chief Fatih Birol reiterated that producers might need to revise output upwards to meet growing demand from China.
Prices were also lifted after Deputy Prime Minister Alexander Novak said Russia would cut its crude oil production by 500,000 bpd from March, saying the "voluntary cut" comes as Russia refuses to sell crude oil to countries adhering to the $60/b price cap introduced by the G7.
OPEC voices were also more positive, as Saudi Energy Minister Prince Abdulaziz bin Salman warned that sanctions and underinvestment in the energy sector could result in a shortage of supplies.
The IEA and OPEC lifted 2023 forecasts by 100,000 bpd, as both see demand rising to a new record of close to 102 million bpd, fuelled primarily by a resurgent China.
The February 2023 monthly average was down by more than $10/b on the February 2022 average of $92.34/b.
Friday's Dubai cash assessment of $81.90/b was around $1/b up from last month's expiry price of $80.88/b.
Structure
Meanwhile, the key M1/M3 Dubai cash spread, closely monitored by Saudi Aramco and other Middle East National Oil Companies (NOCs), averaged $2.03/b in February compared to $1.12/b in January, flagging a likely increase in Official Selling Prices (OSPs) for April-loading barrels by Saudi Aramco and other regional producers.
Sources said the flagship Saudi Arab Light could be hiked by over $0.50/b from the current level of Platts Dubai/DME Oman +$2/b.
Medium sour grades, such as Oman, Upper Zakum and Al Shaheen, were changing hands at Dubai swaps plus around $2/b during the second half of February, which are typically sold at a discount to Arab Light.
Asia cash February Brent averaged $83.75/b over the month based on the 1630 Asia close, up a modest 0.2% from last month's average of $83.52/b as the North Sea marker struggled under the weight of a glut of Atlantic Basin crudes competing for homes and crumbling European diesel cracks.
As such, the Brent/Dubai cash spread crunched to an average of $1.65/b, compared to last month's average of $3.14/b.
US WTI averaged $77.30/b based on the 1630 Singapore marker price, down from $78.13/b the previous month, as US crude struggled amid growing inventories.
For a full Dubai and crude oil pricing history, visit Quantum's pricing pages.
