Asia oil/products: Crude rally continues, light end cracks rise again

23 Jul 2021

Quantum Commodity Intelligence – Middle East crude maintained upwards momentum Friday with losses from earlier in the week fully recovered.

Dubai cash for September delivery was assessed $72.25/b on July 23 (1630 Singapore time), up $0.85/b from the previous session, while DME Oman was up $1.15/b at $72.71/b.

On the week, Dubai was $0.05/b higher.

Cash Brent (BFOE) for September was assessed at $73.54/b, up $0.92/b on Thursday’s Asia close, while the Brent/Dubai cash spread was around a 4-month low of $1.29/b.

However, as the September business cycle winds down the spot market remains sluggish with China largely sidelined.

Late-September Russian ESPO was done at below Dubai +$2.50/b, while Iraq was said to have not found buyers willing to pay a premium to the OSP for September Basra grades.

But down the curve the structure was seen strengthening, with Oct/Nov cash widening out to over +$1.20/b and Nov/Dec pushing toward +$1.00/b.


Naphtha cracks hit a multi-year high as strong bidding in the Platts window pushed up prices. No deals were heard but prices were said to be rising on the back of more petrochemical demand from two new South Korean crackers as well as a stronger light ends picture. With a crack of above $143/mt, naphtha cracks have been on a three-month bull run that was also triggered by fears of lower run rates in Asia and propane spreads. Quantum assessed at $682.50/mt.

Gasoline cracks jumped to an eight-session high as naphtha cracks rose and cracks elsewhere improved marginally. Several deals were heard at between $82.10-82.30/b FOB Singapore although bidding was heard higher still. Quantum assessed at $82.40/b FOB Singapore, leaving the crack edging closer to $9/b with cracks in an upward trend for more than two months.

Jet cracks eased on Friday after jumping a day earlier. The flat price was assessed at $76.93/b FOB Singapore. One deal was heard at a $0.10/b premium over balmo July swaps, which worked out at a $0.15/b discount to the underlying swap strip, a fall of almost $0.20/b on the day, according to Quantum data. Exports from east to west remain solid with the spread at just under $19/mt, although regional demand looks shaky with New Zealand suspending quarantine-free travel with Australia.

Diesel cracks rose marginally on the day versus Brent with the spot crack assessed at $5.81/b, up $0.09/b on a flat price assessment of $79.35/b FOB Singapore, which was $1.01/b higher on the day. The cash differential was down to flat with overlapping bids and offers heard for different spot loading dates. Distillate cracks remain in a downward trend due to a global glut in supply. No deals were heard.

Fuel oil cracks were broadly steady on the day versus Brent, with two marine fuel 0.5% trades heard at a $1/mt premium over the underlying swaps and resulting in a flat price of $528.25/mt FOB Singapore. Spot cracks have been on the rise over the past three weeks but have started to ease recently. 380cst higher sulfur was offered at a $2/mt premium over swaps and assessed at $1.75/mt resulting in a flat price of $407.75/mt, a discount of $120.50/mt on marine fuel.