Asia oil/products: Brent/Dubai at 2.5 month low, product cracks mostly firmer

15 Jun 2021

London (Quantum Commodity Intelligence) – Middle East crude prices eased slightly Tuesday, but market structure and sentiment remained firm as talks to revive the Iranian nuclear deal looked set for further delays.  

Dubai cash for August delivery was assessed at $71.75/b on June 15 (1630 Singapore time), down $0.13/b from Monday’s Singapore close, while DME Oman futures for August settled $71.92/b at the Asia close, down 0.22/b.

With additional Iranian barrels now seen unlikely to return in the third quarter, the Middle East sour crude market looks increasingly tight for the remainder of the year, said traders.

Underlining the strength of the Middle East market, the Brent/Dubai cash spread narrowed to $1.30/b for August, the lowest spread since late March, while the Aug/Oct backwardation remains above $2/b.

Meanwhile, China’s Rhongsheng has issued its first tender for August, calling for up to 2 million barrels of various grades.

Cash Brent (BFOE) for August was assessed at $73.05/b, down $0.42/b from Monday’s Asian close.

Products

Naphtha cracks dipped to a three-week low on Tuesday. No bids or offers were heard, but demand was said to be stable. Flat prices were assessed at $635/mt for August delivery CIF Japan, down $9.50/mt on the day due to weaker crude. The crack versus cash Brent was marked at $98/mt, the lowest since 25 May.

Gasoline differentials were left unchanged in the absence of fresh data. The flat price for 15-30 day loading was marked at $78.45/b FOB Singapore. The crack was marked at $5.40/b – a one-week low – as paper cracks fell by more than 10%, or $0.55/b on the day.

Jet kero cracks flatlined on the day and the cash differential was left unchanged. The flat price for 15-30 day loading was marked at $76.21/b and the crack at $3.16/b FOB Singapore.

One diesel 10ppm trade was heard at flat to the underlying swaps – equivalent to a parity price of $79.02/b, up $0.06/b on the day. Paper cracks were marginally higher, leaving the spot crack at $5.97/b – a five day high.

Higher sulfur fuel oil cracks firmed for the third successive day, as paper values rose. Spot cracks were marked at -$8.13/b, up $0.29/b on the day, as cash differentials were marked at -$0.45/mt and paper cracks were firmer. The cash differential for marine fuel 0.5% was pegged at -$0.75/b, marking a flat price of $521.25/mt. The crack was assessed at $2.49/b, up $0.10/b on the day and the highest for four days.