Asia Crude Oil: Key Market Indicators For Feb 14-18


Crude oil futures are expected to remain bullish this week Feb. 14-18 on the back of fresh tensions on the Russia-Ukraine front after the US issued further warnings on Feb. 11 and over the weekend of an impending attack, sending oil prices to settle more than $3/b higher on Feb. 11.

Crude oil futures were trading sharply higher at the start of the new week ending Feb. 18. At 0200 GMT Feb. 14, front-month April ICE Brent crude futures stood at $95.73/b, up $1.29/b (1.37%) from the Feb. 11 settlement, says an article published in Platts.

Middle East Crude

Spot trade for April loading crude is expected to peak this week with several tenders expected. Eyes are on Qatar Energy’s monthly tender offering its Al-Shaheen crude.

Spot differentials could be higher this month especially for medium, sour grades as a tight sweet crude market could prompt refiners to shift their buying interest towards medium and heavy grades.

Tenders for Russian ESPO Blend crude are also expected this week with differentials likely to surge this month amid stronger demand cues.

Market participants will keep an eye on arbitrage crude into Asia as medium, sour grades such as Mars were heard offered at competitive prices. A lower volume of arbitrage crude could tempt buyers and pressure the sour complex.

Dubai cash-futures, or M1-M3, averaged $3.53/b in the week ended Feb. 11, against $3.04/b in the week ended Feb. 4.

Intermonth spreads were wider during mid-morning trade Feb. 14 with April-May pegged at $1.48/b, up 25 cents/b from the Asia close Feb. 11.

April Brent-Dubai Exchange of Futures for Swaps was pegged at $5.63/b mid-morning Feb. 14, up from $4.78/b at the Feb. 11 close.

Asia Pacific Crude

Market participants are awaiting trade activity for April-loading barrels of Australia’s North West Shelf condensate, while keeping a close watch on overhang condensate barrels from the March-loading cycle.

Spot and term tender results for April-loading barrels of Qatar’s DFC and LSC will likely be announced later this week.

Traders will be keeping a lookout for results of Indian ONGC’s second Far East Russian Sokol crude tender this week, following an on the month jump in cash premiums from the first April-loading deal.

The April-loading programs for Australia’s Ichthys Field Condensate, Cossack and Papua New Guinea’s Kutubu Blend are expected to be known this week.

Traders will be looking out for the April-loading program of Malaysia’s Kimanis crude and tender activities from Vietnam’s PV Oil.

Market participants will also be keeping a close watch on the results of Malaysian Petco’s second March-loading tender for heavy sweet crude Dar Blend. The first cargo traded at premiums that were higher on the month amid sturdy LSFO cracks.

Delivered Crude

Arbitrage flow of the US’ WTI Midland crude into Asia remains in focus, while sweet crude tender activity from Taiwan’s CPC Corp. may emerge later this week.

Market participants await fresh trades on May arrival barrels of Brazil’s Tupi crude to Asia, as sentiment ticked higher amid strong western demand.

Crude Futures

The latest surge in oil prices will add further impetus for the US and other oil consuming nations to find ways to cool surging consumer prices. Iranian nuclear talks, a deal which could add close to 1 million b/d of oil to export markets, appeared to have hit a stumbling block over the weekend.

In the week ended Feb. 11, the international crude oil benchmarks were higher with the April contract for ICE Brent futures up 1.3% on the week to settle at $94.44/b, while the March contract for NYMEX light sweet crude was 0.9% higher at $93.10/b.

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Source: Platts


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