Second ESPO tender awarded, July premiums hold firm  

London, (Quantum Commodity Intelligence) – Russia's Surgutneftegaz has awarded a second round of July-loading ESPO cargoes via tender Wednesday, confirming premiums at near one-year highs of well above $3.00/b over July Dubai swaps,

Surgut, the main exporter of ESPO, has awarded three cargoes to unnamed buyers at premiums of up to $3.50/b, said a source.

On Tuesday, Surgut awarded the first batch of July-loading cargoes of the medium sweet blend to trading house Mercuria at premiums of Dubai +$3.10-$3.30/b.

Surgut is expected to issue a third July tender, for two or three further cargoes.

The higher premium reflects the overall increase in premiums for medium sweet crude, a widening of the Dubai crude oil structure and stronger distillate cracks.

This week, the Brent/Dubai EFS moved back above $3.00/b, as Dubai backwardation steepened.

This makes Dated Brent-linked crudes more expensive compared to Dubai-linked grades.

Diesel cracks reached a 13-month high of $6.25/b for June in Asia this week, while jet kero cracks have held up at around $4/b.

ESPO cargoes loading in June were sold in Dubai +$2.40-$2.60/b range, while May barrels sold at Dubai +$1.30-$1.50/b.