Dubai structure narrows, light end cracks firm

28 Apr 2021

London (Quantum Commodity Intelligence) – Middle East crude oil edged higher in outright price terms Wednesday, but market structure came under strong downwards pressure following the OPEC+ decision to proceed with the planned production hikes despite the sharp fall in Indian demand.

Dubai cash for June delivery was assessed at $63.55/b on April 28 (16.30 Singapore time), up $0.30/b from Tuesday's Singapore close.

But the June/July spread retreated sharply from +$0.30/b to parity, as fears over prompt demand easing off due to lockdowns in India and Japan.

DME Oman futures for June settled $62.71/b at the Asian close, up $0.34/b, but June/July moved into a contango structure.

Cash Brent (BFOE) for June was assessed at $66.34/b, up just $0.09/b versus Tuesday's Singapore close, as the Brent/Dubai cash spread narrowed to $2.79/b, while the June EFS retreated to $3.24/b.

Products

As Brent flatlined, product cracks were broadly flat-to-lower with only gasoline and naphtha firming against crude.

In gasoline three deals were heard - 92 RON traded at $72.50/b loading mid-May FOB Singapore and 95 RON traded twice at $74.58/b at the same port, indicating a rebound in spot gasoline cracks versus cash June Brent at $6.11/b versus $5.56/b a day earlier.

Naphtha cracks rose for the third successive day, with May margins basis CFR Japan increasing from $82.57/b on Monday to $92.58/mt on Wednesday. One spot deal was heard for 1H July at $579/mt CFR Japan.

Distillate cracks were broadly similar on the day, with 10ppm diesel May cracks versus cash Brent holding steady at $4.58/b.

Three spot deals were heard for loading in the last decade of May at -$0.10 to -$0.15/b. indicating a flat price of $70.22/b.

For jet kero, no deals were heard and cracks along the curve nudged $0.10/b higher.

Fuel oil cash differentials weakened to $0.50/mt for both 180cst and 380cst on two deals. No marine fuel deals were heard and the cash differential was marked at $1/mt.

Marine fuel cracks fell back to below $13.04/mt versus Dubai cash.