Crude oil futures were lower during mid-morning trade in Asia Aug. 10 from the Asian close Aug. 6 as a rise in COVID-19 infection rates in major oil-consuming economies weighed on the demand outlook and a stronger US dollar provided further headwinds for prices.
ICE October Brent crude futures stood at $69.01/b at 0200 GMT Aug. 10, down $2.77/b from the 0830 GMT Asia close Aug. 6, says an article published on S & P global website.
Middle East crude
Saudi Aramco last week raised prices for its September loading Asia-bound crude cargoes by 20-60 cents/b, while ADNOC issued prices for its crude grades.
Activity in the Middle East crude market was minimal last week, though India issued a tender seeking October loading crude from the Middle East, West Africa and US. The result of the tender is awaited.
Iraq’s SOMO issued a tender offering 2 million barrels of September loading Basrah Medium crude that closes Aug. 12 with same-day validity.
Dubai cash/futures (M1/M3) averaged $2.38/b in the week ended Aug. 6, against $2.03/b in the week ended July 30.
Intermonth spreads were lower during mid-morning trade Aug. 10, with the October-November pegged at 57 cents/b, down 6 cents/b from the Asia close Aug. 6.
The October Brent/Dubai Exchange of Futures for Swaps was pegged at $3.31/b mid-morning Aug. 10, down 20 cents/b from the Asia close Aug. 6.
Asia-Pacific crude
Ultra-light sweet condensate market participants are awaiting the release of Indonesia’s TPPI condensate tender to absorb unsold arbitrage barrels, after three cargoes of Australia’s North West Shelf condensate were heard available for October loading.
Qatar’s QPSPP is expected to issue its October loading tenders for DFC and LSC, for which cash premiums could dip lower amid a narrower Brent/Dubai EFS spread on the month. Traders are also expecting Indian ONGC’s tender results this week for October loading barrels of Sokol crude, which is also Dubai-linked.
The October loading program for Papua New Guinea’s Kutubu Blend was also due for release, while activity for Australia’s Cossack and Ichthys condensate was also expected to kick off this week.
Market participants will be looking out for the October loading program for Malaysian crude, as well as further tender activity by Vietnam’s PetroVietnam Oil. Cash premiums for October loading regional grades were expected to weaken amid pandemic resurgences across Southeast Asia, coupled with refinery run cuts heard.
Delivered crude
Trading activity for US WTI Midland crude into Asia remains in focus following pockets of buying activity from South Korean end-users as cash premiums edged higher on stronger demand.
China’s demand for November arrival cargoes of Brazilian Tupi crude remains patchy with few deals reported, as most cargoes were diverted to the West.
Crude futures
The trajectory of crude futures will likely be tethered to pandemic developments this week, with particular concern over rising case numbers in China, which is batting its biggest outbreak since the virus emerged in Wuhan in 2019. Rising case numbers in other parts of the world, and in particular the US, have also weighed on sentiment.
Crude futures may also be weighed down by a stronger dollar as Treasury yields have risen after a strong non-US nonfarm payrolls report and hawkish comments from some members of the Federal Reserve.
Analysts surveyed by S&P Global Platts expect an uptick in refinery utilization to have pushed US crude stocks down 600,000 barrels in the week ended Aug. 6, and downstream gasoline and distillate stocks to have fallen by 2.4 million barrels and 600,000 barrels, respectively. Weekly inventory reports by the American Petroleum
Summary
- Crude oil futures were lower during mid-morning trade in Asia Aug. 10 from the Asian close Aug. 6 as a rise in COVID-19 infection rates.
- Activity in the Middle East crude market was minimal last week, though India issued a tender seeking October loading crude from the Middle East, West Africa and US.
- Crude futures may also be weighed down by a stronger dollar as Treasury yields have risen after a strong non-US nonfarm payrolls report and hawkish comments from some members of the Federal Reserve.
- Analysts surveyed by S&P Global Platts expect an uptick in refinery utilization to have pushed US crude stocks down 600,000 barrels in the week ended Aug.
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Source: S & P global
