Asia Crude Oil: Key Market Indicators for Aug 23-27


Crude oil futures were lower in mid-morning trade in Asia Aug. 23 in the wake of weak spot demand cues, especially from China, due to limited availability of import quotas, reports Platts.

ICE October Brent crude futures stood at $66.05/b at 0300 GMT Aug. 23, down 44 cents/b from the 0830 GMT Asia close on Aug. 20.

Middle East crude

Trade in the Middle East crude market is likely to remain weak as buyers hold back on spot purchases because of muted demand cues and a sturdy sour crude complex.

Qatar Petroleum, in the week ended Aug. 20, was heard to have sold, via tender, one 500,000-barrel October-loading Al-Shaheen crude cargo at a premium of around $2.62/b to Platts front month Dubai crude assessments, and two Al-Shaheen cargoes at premiums of around $2/b.

Qatar Petroleum also sold a October-loading Qatar Land cargo at a premium of around $1.70/b-$1.80/b. The cargo was bought by private Indian refiners, sources said.

Taiwan’s CPC bought, via tender, a 500,000-barrel of Upper Zakum crude from PetroChina at a premium of around $2.20-$2.25/b to Platts front month Dubai crude assessments, sources said.

Iraq’s SOMO was heard to have sold a 2-million-barrel cargo of September-loading Basrah Medium crude to Socar at a small premium. SOMO issued another tender offering 2 million barrels of October-loading Basrah Light crude. The tender closed Aug. 16 and the results are awaited.

Dubai cash/futures (M1/M3) averaged $2.12/b in the week ended Aug. 20, against $2.26/b in the week ended Aug. 13.

Intermonth spreads were higher during mid-morning trade Aug. 23 with October-November pegged at 67 cents/b, up 1 cent/b from the Asian close on Aug. 20.

October Brent/Dubai Exchange of Futures for Swaps was pegged at $2.92/b mid-morning Aug. 23, down 8 cents/b from the Asian close on Aug. 20.

Asia Pacific Crude

Market participants will be monitoring trading activities on Australia’s North West Shelf condensate following Woodside’s cargo trading at premiums to Dated Brent, FOB, despite weaker naphtha cracks and scanty demand.

Trading activities for November-arrival Far East Russia’s Sakhalin Blend are expected to kick off, with cash premiums anticipated to be lower on the month following a narrower Brent/Dubai EFS spread.

In Southeast Asia, traders await tender results from ConocoPhillips on Malaysia’s Kimanis crude, and PV Oil on Vietnam’s Ruby crude. Spot deals on Malaysia’s Miri, Kikeh and Labuan crudes are also expected.

Traders will seek more clarity on tender results for Sudan/South Sudan’s September-loading Nile Blend, where sentiment is expected to dip following weaker Chinese demand.

Delivered Crude

Market participants await Taiwanese CPC’s tender results for November-delivery sweet crude as the US’ WTI Midland crude was facing competition from West African barrels.

Chinese demand for November-arrival cargoes of Brazilian Tupi crude could remain bearish amid a dearth of spot deals in Asia.

Crude Futures

Investors will keep an eye on the Jackson Hole Symposium set to start Aug. 26, and look for cues on the US Federal Reserve’s pace of tapering its massive bond buying program, which will influence the strength of the dollar.

The international crude oil benchmarks were down sharply in the week ended Aug. 20. The October contract for ICE Brent futures fell 7.66% on the week to settle at $65.18/b, while the September contract for NYMEX light sweet crude was down 8.94% at $62.32/b.

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Source: Platts


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