Qatar hikes Sept OSPs, Al Shaheen Oct premiums seen sharply lower

Quantum Commodity Intelligence - Qatar became the latest National Oil Company (NOC) to hike September official selling prices (OSPs) for Asian refiners Wednesday, following a similar move from Saudi Arabia last week.

QatarEnergy set its Qatar Marine grade for September at a premium of $8.90/b over Platts Dubai/Oman compared to +$8.40/b in August, while the lighter Qatar Land was fixed at +$10/b versus +$9.70/b in August.

The key M1/M3 Dubai cash spread, closely monitored by QatarEnergy and other Middle East NOCs, averaged $9.19/b in July compared to $7.54/b in June, according to Quantum data.

Qatar Marine is a medium sour crude (API 32.6, sulfur 1.84%), while Qatar Land is a light-medium crude (API 41, sulfur 1.22%).

Meanwhile, the state-owned producer is expected to award its keenly-watched Al Shaheen tender next week, although premiums are likely to be significantly lower than last month's award at Dubai +$9-$10/b for September barrels, according to traders.

Like most Middle East crude, Al Shaheen is sold two months forward, but prices against published assessments in the month of loading, so it includes two months of market structure, which has narrowed compared to the same stage in July.  

So far in August, the M1/M3 (Oct22/Dec22) Dubai spread has averaged around +$5.87/b and was assessed by Quantum on Wednesday at +$5.84/b.

Sources expect bids in the +$5.75-$6.50/b level for October-loading Al Shaheen, depending on loading dates (prompter cargoes being more expensive) and how the market structure moves over the next few days.

Current backwardation is also seen as an early indicator for steep cuts to Middle East OSPs for October-loading crude, which at current levels would warrant reductions of around $3/b, according to Quantum data.