DUBAI FUTURES: Brent/Dubai April EFS narrows; Focus on OPEC+ meet, Asian buying trends


Front-month exchange of futures for swaps narrowed mid-morning on March 1 as the outcome of OPEC+ alliance’s upcoming March 4 meeting and buying patterns in key Asian economies of China and India take center stage in the new trading month.

The May Exchange of Futures for Swap was valued at $2.56/b at 11am (0300GMT) in Singapore on March 1, down by 15 cents/b from the Asian close on Feb. 26, S&P Global Platts data showed.
The Brent/Dubai EFS is a key indicator of the spread between light, sweet and heavy, sour crudes, and a narrower EFS makes crude priced against Dubai less economically attractive for Asian refiners compared to Brent-linked ones.

Supply side fundamentals in the Middle East market will be shaped by the outcome of the OPEC+ alliance meeting, where a easing oil supply cuts is widely expected among market participants.

As oil prices have risen to multi-month highs along with a drawdown in global crude stocks, an easing of cuts by the group of oil producers is expected to be announced.

Saudi Arabia’s voluntary cuts of 1 million b/d have been a key source of support for the Middle East crude oil market, while demand from Asian buyers has stayed low due to renewed COVID-19 outbreaks and refinery downtime.

Demand recovery for key Asian buyers such as China and India continue to be of significant interest as trade for May-loading nears kick off.

“India is doing ok, but I don’t think China will be back. [There is] strict movement control so demand of product is low, and inventory is still high, [so I] don’t think they will be back for the next month at least,” said a source from a North Asian trading house.

At mid-morning in Singapore (0300 GMT), the May/June Dubai time spread was valued at 70 cents/b, inching up 5 cents/b from Asia close Feb. 26, Platts data showed.

Meanwhile, the June/July Dubai time spread was valued at 63 cents/b on March 1.
Source: Platts