Asia Crude: Key Market Indicators for Aug 22-26

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Crude oil prices could face further downward pressure over Aug. 22-26 as investors keep an eye out for progress on an Iranian nuclear deal and as Russia’s crude exports continue to prove more resilient than expected, reports Platts.

Front-month ICE October Brent crude futures stood at $95.80/b at 0240 GMT Aug. 22, down 92 cents/b (0.95%) from the Aug. 19 settlement.

Middle East

  • Trade activity for October-loading crude cargoes could ease this week, though some Asian buyers could still seek Middle East grades.
  • China’s demand remains in focus, despite concerns of a weakening economy, as domestic refiners are expected to seek more crude for heating requirements as winter approaches.
  • Trading in Iraq’s Basrah crude for September loading has been negligible to date in August, and Canadian and Colombian heavy sour grades being offered competitively was set to continue weighing on buying interest.
  • The Dubai cash/futures (M1/M3) spread averaged $4.15/b in the week to Aug. 19, narrowing from $5.44/b the week before.
  • Intermonth spreads were narrower in mid-morning trade Aug. 22 with October-November pegged at $1.37/b, down 5 cents/b from the Asia close Aug. 19.
  • The October Brent-Dubai Exchange of Futures for Swaps was pegged at $4.56/b in mid-morning trade Aug. 22, down 67 cents/b from the Asia close Aug.19.

Asia Pacific

  • Trading activity for October-loading barrels of Australia’s North West Shelf condensate will be in focus Aug. 22-36 amid signs of a slight recovery in light distillate cracks.
  • Clarity on Qatar Energy’s tender results for October-loading barrels of low sulfur condensate was awaited.
  • Far East Russian crude flows were also in focus amid activity for November-delivery barrels of Sakhalin Blend.
  • Trading activity for October-loading barrels of Australia’s Ichthys field condensate will be in focus this week, with clarity on trade details for October-loading barrels of Papua New Guinea’s Kutubu Blend also awaited.
  • Pockets of regional medium sweet crudes are expected to change hands this week, with traders awaiting details of tender results for Vietnamese crudes from PetroVietnam Oil.
  • Details of the October-loading programs for Australia’s Vincent and Pyrenees crudes were expected within days.
  • September Malaysian Crude Oil OSP differentials were also expected this week.

Delivered

  • Taiwan CPC Corporation’s sweet crude tender for November delivery barrels was awaited amid retreating cash premiums for Asia delivered WTI Midland crude barrels.
  • Cash premiums for November delivery barrels of Brazil’s Tupi crude could remain weak amid lukewarm Chinese demand and a near-term uptick in Brazilian exports.

Crude futures

  • The Jackson Hole symposium, a worldwide global gathering of central bankers Aug. 25-27, will be watched for cues on the health of the global economy, with US Federal Reserve chair Jerome Powell set to speak Aug. 26.
  • Global crude oil benchmarks were lower in the week to Aug. 19, with the October contract for ICE Brent futures down 1.5% on the week to settle at $96.72/b and the September contract for NYMEX light sweet crude down 1.4% at $90.77/b.

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Source: Platts

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