Middle East crude tracks lower after US data, marine fuel cracks dump
London (Quantum Commodity Intelligence) – Middle East crude eased back Thursday following the previous-day's losses in futures prices, but Dubai continued to gain on Brent with the Brent/Dubai cash spread narrowing to a 3-week low.
Dubai cash for July delivery was assessed at $67.11/b on May 5 (16.30 Singapore time), down $0.70/b from Wednesday's Singapore close, while the July/Aug spread was $0.05 wider at +$0.60/b. DME Oman futures for July settled $67.28/b at the Asian close, down $0.52/b on the day.
Cash Brent (BFOE) for July was assessed at $69.14/b, down $0.66/b versus Wednesday's Singapore close. The Brent/Dubai cash spread narrowed to $2.03/b for July, the narrowest spread since April 17.
The narrower spread is, however, attributed to relatively weaker Brent with the North Sea maintenance program largely completed by July.
The June Brent/Dubai cash moved above $3.00/b in late April, the highest for one year, as North Sea maintenance peaks during June.
Products
The big move in cracks on Thursday was marine fuel 0.5%, with flat prices collapsing more than $12.25/mt to $494.75/mt FOB Singapore, far outstripping the fall in crude and cracks fell by a whopping $1.27/bl to $8.77/b.
That fall was driven by a huge stock build in Singapore and swaps slipped from a $0.25/mt May - June backwardation on Tuesday versus a contango of -$1.70/mt.
Elsewhere, there were relatively big changes in the jet market, with cash differentials rising on an expected summer boom for airline travel.
One spot deal was heard at $0.20 over balance May swaps, equivalent to -$0.18 over the underlying futures - equating to a flat price of $72.80/b FOB Singapore and a crack versus July cash Brent of $3.66/b - up $0.26/b on the day and the highest for months.
Diesel cracks fell back, however. Spot deals for 10ppm were heard at $0.10/b under the underlying futures, equating to a flat price of $73.15/b FOB Singapore and a crack of $4.01/b, down $0.61/b on the day.
In light ends, gasoline cracks were broadly stable with flat prices tracking crude south. 92 RON was marked at $75.94/b FOB Singapore and 95 RON at $78.07/b FOB Singapore.
Naphtha cracks fell back, reversing some of eight days of successive gains, with a flat price deal heard at $611/mt CFR Japan for second half July. Quantum marked CFR Japan at $609/mt, leaving the front month crack at $101/mt, down $4.50/mt on the day.