Asia oil/products: Dubai structure holds firm, Diesel tops $180/b

23 Jun 2022

Quantum Commodity Intelligence – Middle East crude prices were little changed Thursday with firm demand seen underpinning East of Suez markets, while diesel cracks consolidated above $70/b versus Brent. 

Dubai cash for August delivery was assessed at $106.45/b on 23 June (1630 Singapore time), down $0.15/b from the previous Singapore close, while DME Oman futures for August closed at $106.47/b, also down $0.15/b.

Softer outright prices this week have not been reflected in the Dubai structure with the key M1/M3 (Aug22/Oct22) spread ramping up to around +$7.80/b, indicating a sharp increase in Official Selling Prices for August.

Dubai partials saw another lively session with a third Oman of the month declared following convergence - Unipec selling to Petrochina. On a swaps basis, both Oman and Upper Zakum were valued at +$7.80/b, while Al Shaheen was valued at around +$8.50/b.

ICE Brent futures for Aug22 were valued at $109.52/b on the Singapore 1630 close, down $0.61/b from the previous Asian close and crunching the Brent/Dubai spread to a six-week low. August Brent/Dubai cash spread was $0.46/b lower on the day at $3.07/b, while the August Brent/Dubai EFS was slightly firmer at $10.89/b.

Meanwhile, SOMO’s Basrah Medium tender was heard done at around OSP +$0.20/b, while Basrah Heavy was said to be struggling to find buyers with refiners looking for lighter barrels.


Naphtha cracks firmed for the fourth day out of five to hit a near one-month high. Firmer gasoline prices, hauled higher by a shortage of octane boosters, are providing some support. Only bids for H1 August were seen at levels around $790/mt CIF Japan. Swaps moved higher on the day.

Two gasoline trades were seen for 92 RON loading 15-20 days forward and 20-25 days forward, indicating no easing of demand, despite reports that Indian buyers had cancelled some tenders on surging prices. 92 RON was assessed at $145.91/b FOB Singapore, down $1.85/b on a day when crude fell by marginally less. A trade of $147.20/b FOB Singapore was heard as well as $146.40/b. In both cases, the offers were hit.

There was no let up in the rise of distillate margins, despite a rise in stocks in the hub. Jet physical indications were not seen again and the cash differential was assessed unchanged at $3/b over swaps, leaving a flat price assessment of $164.94/b FOB Singapore. While Q3 swaps fell $0.35/b on the day to $158.05/b, they did so marginally less than crude to push up cracks again, albeit marginally. All of the strength in jet is coming from diesel with the regrade for July widening $1.35/b on the day to -$11/b, the lowest level on record. And that’s despite solid jet fuel demand.

Diesel bids pushed the cash differential marginally higher to $6.95/b, with Unipec bidding for a prompt cargo at $7.3/b above swaps. That left physical cargoes assessed at $180.08/b, up $1.06/b when crude fell, and the crack at $72/b, up $2/b on the day. Firmer swaps continued to underpin physical markets as well as firmer European values, but diesel prices in the region continue to be underpinned by Asian fundamentals as best evidenced by the EFS, which hovers either side of zero.

Marine fuel prices rose on the day against crude with rising swap values and a static cash differential pushing up physical flat prices. Cargoes for loading in 10-25 days were assessed at $961/mt, up $1/mt on a day when crude dropped. That extended the record high of marine fuel over crude that was reached on Wednesday. Front month backwardation has risen $20/mt since the start of June to $60/mt, indicating a very tight market. That wasn’t seen in the stocks figures, which rose 800,000 barrels to 21.4 million.