Qatar Petroleum sells Al Shaheen at firm premiums for August cargoes
London (Quantum Commodity Intelligence) – Qatar Petroleum (QP) has awarded its monthly Al Shaheen tender for August loading at premiums in excess of $2.00/b, the highest levels versus Dubai swaps in the post-pandemic period.
A cargo loading the first week of August was heard at around Dubai swaps +$2.50/b, while a second cargo loading late-August was heard awarded at Dubai +$2.20-$2.30/b.
The premiums reflect firm demand for Middle East barrels loading in August, plus steep backwardation on the Dubai market structure as the M1-M3 spread (Aug/Oct) widened to more than $2.00/b this week, according to Quantum data.
The Al Shaheen tender is closely watched as it acts as a price indicator for the Middle East medium sour crude market and is also a component of the Dubai 'basket' of crudes, regularly setting the price of Dubai as the lowest of the five deliverable grades into the pricing mechanism.
Most of the premium is built into the market structure, as August-loading cargoes are priced against Platts Dubai assessments during the month of August - when October is the front-line month for Dubai.
On Thursday, Quantum assessed the Aug/Oct Dubai spread at $2.02/b, which automatically gives Al Shaheen a premium of around $2.00/b against the underlying August price - which is also the August Dubai swap.
As a deliverable grade into the Dubai mechanism, Al Shaheen cannot price below Dubai on a like-for-like basis, although it may trade at a negative differential in a contango market.
Dubai cash for August delivery was assessed at $72.30/b on June 17 (1630 Singapore time), down $0.45/b from Wednesday's Singapore close
Meanwhile, the Qatar Land tender for August was heard awarded at Dubai swaps +$1.80-$1.90/b, while Qatar Marine was heard at Dubai swaps +$1.70-$1.75/b.
