Tuesday, June 22, 2021

Crude MOC: Cash Dubai rangebound as market awaits key tender outcomes

Benchmark cash Dubai was near-steady at the Asian close Jan. 20 as the market awaited the outcome of key Asian tenders.

S&P Global Platts assessed March cash Dubai at a premium of 48.5 cents/b to the same-month Dubai futures, down 4.5 cents/b from the close on Jan. 19.

Similarly, March cash Oman was also valued at a premium of 49 cents/b to front-month Dubai futures, down 4 cents/b from the previous day.

Traders awaited the outcome of tenders issued by Asian buyers, which they hoped would firm demand for Middle East crude that has so far remained largely dormant.

Chinese refiner Rongsheng issued a tender for 500,000-2 million barrels of various March-loading sweet and sour crude grades. The tender closes Jan. 21 with same-day validity.

Indian Oil Corp., or IOC, issued another tender closing Jan. 21, seeking March-loading cargoes of West African, Middle East crude and other crude grades. The country’s largest refiner recently purchased 4 million barrels of West African crude and 1 million barrels of Das Blend crude. Fellow-refiner MRPL too issued a tender, seeking 1 million barrels of sour crude for delivery in March. The tender closes Jan. 27 with validity until Jan. 29.

Taiwan’s CPC issued a tender seeking unspecified quantities of March-loading Middle East crude. The tender closes Jan. 20 with validity Jan. 22.

“Market seems to be stabilizing with all the buying interest. If Rongsheng buys Middle East crude, it will help sellers clear out the cargoes in hand,” said a trader in Singapore.

However, concerns remain on the availability of arbitrage barrels from the West, where COVID-19 induced lockdowns have lead to flagging demand.

Tenders issued by IOC and Rongsheng offer options to buy crude from various regions including West Africa, America and North Sea.

“Expect India and China to buy some Middle East crude. But if they go for more of arbs [arbitrage] then it will hurt the [Middle East] market as the Chinese do tend to prefer Urals,” said another crude oil trader.

The Platts Market on Close assessment process on Jan. 20 saw two 25,000-barrel Dubai partials traded, with Shell and Reliance on the sell side and Total and Mercuria on the buy side.
Source: Platts

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