Asia oil/products: Dubai rallies on OPEC+
Quantum Commodity Intelligence – Middle East crude prices rallied strongly for the first day of July on expectations of a cautious approach from OPEC+, while gasoline once again led the products complex.
Dubai cash for September delivery was assessed at $73.80/b on July 1 (1630 Singapore time), versus September Dubai on Wednesday, while DME Oman futures for September were up $1.70/b at $74.03/b.
Ahead of Thursday’s OPEC and OPEC+ meetings, consensus was for a modest increase in production, with producers reluctant to hike output by 1 million bpd, fearing the creep of the Delta variant.
A modest OPEC+ hike is expected to more supportive for Middle East crude, as September Brent/Dubai narrowed by around $0.30/b to $1.76/b.
Cash Brent (BFOE) for August was assessed at $75.56/b, up $1.42b from Wednesday’s Asian close.
Naphtha cracks edged higher for the third successive day on Thursday. No deals were reported and the assessment rolled to September delivery. Flat prices were marked at $675/mt with the crack at $121/mt CIF Japan.
Gasoline RON 92 cracks rose to the highest level in months as Singapore stocks fell, the swaps curve rose and the market took into more backwardation. Q4 cracks rose marginally. Several deals were heard at $83/b for 92 RON with 95 bid at a $1.85/b premium. The 92 RON crack was marked at $7.44/b on a flat price of $83/b FOB Singapore.
Jet cracks rose for the third successive day, although they remain low and at where they were a week earlier. Cash differentials were marked at -$0.40, with bids and offers wide apart. Jet fuel consumption in India remains sluggish. The crack was marked at $2.29/b on the backwardated crude market on a flat price of $77.85/b FOB Singapore.
Diesel 10 ppm cracks firmed as the flat price climbed to $80.62/b FOB Singapore with the crack rising to $5.06/b. One deal was heard at a $0.10/b cash differential.
Fuel oil cracks were higher, with 0.5% marine fuel trading at a positive differential of $1.50/mt. August paper cracks rose $0.28/b to $3.67/b FOB Singapore.