Murban sets Dubai crude assessment for first time since April
Quantum Commodity Intelligence – The Dubai crude oil benchmark was set Wednesday by the rare nomination of Murban via the Platts Market-on-Close price discovery window, as values for light-sweet Murban slumped to around parity medium-sour grades.
Sources said that TotalEnergies declared the Abu Dhabi grade to Gunvor and Equinor on convergence, noting that the French major is an equity holder in Murban so has ready access to the grade.
According to Quantum records, this is the first time since April that Murban has been nominated in the Platts crude window, with the Adnoc flagship grade typically holding a healthy premium over Dubai in recent months.
Dubai partials are traded in clips of 25,000 barrels and after the same two counterparties reach 20 partials, or 500,000 barrels, the seller must nominate one of the 'Dubai basket' grades – namely Dubai, Oman, Upper Zakum, Al Shaheen and Murban – while the buyer is obliged to accept the nomination.
In practice, this will be the least valuable grade, which for most of 2023 has been Upper Zakum or Oman, with occasional nominations of Al Shaheen and Dubai.
Futures
Exchange data Wednesday showed Murban futures trading on Abu Dhabi's IFAD exchange settling at $83.23/b, while Jan24 DME Oman futures closed at $83.27/b. This time last month, the spread was around +$1.50/b, with a sluggish performance in gasoil cracks blamed for weakness in the distillate-rich Murban grade.
In addition, the narrow Brent/Dubai EFS has opened the way for a flood of lighter barrels from the Atlantic Basin, providing stiff arbitrage competition for Murban.
At around 40.0 degrees API gravity and 0.7% sulfur, Murban yields a higher percentage of gasoline and distillates compared to medium sour crude and is comparable in quality to North Sea Forties crude.
Upper Zakum is around 34.0 degrees API gravity and 1.85% sulfur. Qatar's Al Shaheen (29.0 API, 1.85% sulfur) and Oman (31.0 API, 1.4% sulfur) are also in the same medium-sour category.
Benchmark 10ppm physical Asian gasoil cracks versus Brent have retreated sharply in recent weeks, dropping from around +$35/b in early October to almost +$20/b last week before rebounding slightly.
By contrast, HSFO cracks have recovered this month, rallying from around $17/b under Brent at the end of October to a discount of around $12/b.
