Asia oil/products: Dubai edges higher, products track crude

29 May 2023

Quantum Commodity Intelligence – Middle East crude markets Monday were slightly higher as benchmark Dubai continued to track Brent movements, while refined products largely moved in line with crude. 

Dubai cash for July delivery was assessed at $76.25/b for 29 May at the Asia close (1630 Singapore), up $0.90/b, while Jul23 DME Oman futures were $0.48/b higher at $75.70/b heading into the expiry.

Spot activity was again focused in the Dubai partials window with a 15th convergence of the month, as Oman continued to set the Dubai print during the latter part of May. The last traded Dubai partial of $76.25/b valued Oman, Upper Zakum and Al Shaheen at Dubai swaps plus around $0.70-$0.80/b, again near two-year lows.

On the lighter grades, Murban has benefited from this month’s higher distillate and gasoline cracks, with the Abu Dhabi flagship grade valued at Dubai swaps +$1.75-1.80/b.

Adnoc said Monday it is set to maintain Murban exports forecasts for July and August at 1.293 million bpd and 1.314 million bpd in July and August, respectively. However, Adnoc nudged up forecasts for May 2024 from 1,321 million bpd to 1,330 million bpd.

ICE Brent futures for Jul23 were assessed $77.38/b at 1630 Singapore, up $1.36/b from the previous Asia close, leaving the Jul23 Brent/Dubai spread little changed at $1/b. The Aug23 EFS was also flat at around $2.25/b on the Asia market close.


The structure in the naphtha paper market remained flat at the start of the week, with only limited buying and selling interest heard for swaps. The open cargo market showed signs of picking up after several slow weeks, however, with plenty of participants looking to offload parcels for the 2H July and 1H August laycans. A deal was struck for the latter as BP took a Sietco offer at $599/mt CFR Japan. While that deal pushed the physical curve further into a discount to paper, the swaps market left outright prices up $7.75/mt on the day at $599.75/mt. The crack was steady, marked just $0.24/mt lower on the day at +$32.11/mt.

There was plenty of interest in the gasoline cargo market as Unipec and Vitol dominated the sell-side of the physical trade. Offering down through the window, Total eventually took a 92 RON offer for Jun 21-25 delivery as they paid Unipec $87.70/b FOB Straits for 50kb. That pushed Quantum’s differential back up after trading at only a slim premium to paper for much of last week, with moves in the swaps market leaving the outright up $0.71/b at $87.79/b. The spot crack to Brent slipped $0.38/b to +$10.35/b.

10ppm diesel swaps rose $1.40/b on Monday amid national holidays in the UK and the US with the market structure unchanged at around $0.25/b. The flat price move tracked crude $1/b higher and left refining margins marginally higher. Front month paper cracks have been broadly stable between $13-15/b all month as the market awaits for firmer European prices or increased signs of Indian exports to open an arb. Few indications were heard in the physical market with cash differentials assessed at $0.27/b.

The front month regrade was broadly stable on the day at -$1.20/b. Like diesel there were again few physical indications for jet. The market remains in a $0.30/b contango structure.

The marine fuel 0.5% sulfur revealed a difference in opinion between sellers, with Vitol hoping to sell at a $17.50/mt FOB Straits premium to paper while BP was looking for $10/mt over. Neither of those were traded during Monday’s session, however, with Quantum’s cash assessment already closer to the $7/mt mark. With limited movement in the paper trade to start the week, the outright pushed $6.63/mt higher on the day to $552.82/mt. The spot crack to Brent was steady, with the spread to June Brent up $0.10/b on the day at $1.93/b while the rest of the curve was down against crude.

High sulfur fuel oil interest was focused on the 180 CST market as Vitol looked to sell at a $7/mt FOB Straits premium and PetroChina at a much more competitive $1/mt premium. That was not enough to move Quantum’s differential, which is sitting just $0.44/mt above the paper market. Monday’s moves left the outright $5.16/mt higher on the day at $428/mt, with the 180 CST crack versus paper steady. For the 380 CST market, moves in swaps lifted the spot $6.87/mt to $427.27/mt. Despite the lack of movement in Asian markets, the east-west spread has narrowed to a two-month low, with relative strength in the European market from tight supply of sour barrels pushing prices higher.