Asia crude oil: Key market indicators for March 21-25

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Crude oil prices are expected to remain volatile, with the uptrend intact, in the week ending March 25 amid a reduction in Russian supply and continued recovery in global oil demand from COVID-19.

At 0200 GMT March 21, front-month May ICE Brent crude futures stood at $110.89/b, up $2.96/b (2.74%) from the March 18 settlement, says an article published in Platts.

Middle East crude

Spot activity for May-loading crude remains sluggish with most Asian refiners pressured by higher crude prices and a stronger sour complex.

Regional buyers are hoping the sour complex will continue to slide lower, which could prompt end-month crude purchases. Some spot tenders could be expected in the week ahead though prices will be the main driver behind buying activity.

Dubai cash-futures, or M1-M3, averaged $8.77/b the week ended March 18, against $11.91/b in the week ended March 11.

Intermonth spreads were narrower during mid-morning trade March 21 with May-June pegged at $2.12/b, down 4 cents/b from the Asia close March 18.

May Brent-Dubai Exchange of Futures for Swaps was pegged at $9.25/b mid-morning March 21, down from $9.66/b at the Asia close March 18.

Asia Pacific crude

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

Across the light sweet crude complex, trade details for May-loading barrels of Ichthys Field Condensate and Kutubu Blend are expected to emerge this week.

Market participants are keeping a close watch for offers of any June-delivery barrels of Far East Russian Sakhalin Blend crude amid the Russia-Ukraine tension, as sentiment remains sluggish with muted end-user demand.

Traders will be looking out for regional spot trades of Malaysia’s May-loading Kimanis and Labuan sweet crudes, as well as tender results of a slew of Vietnamese crudes offered by PetroVietnam Oil.

Market participants will also watch for trades of April-loading Nile Blend; traded levels may rise on the month amid resilient LSFO cracks.

Further details of Australia’s May-loading heavy sweet Vincent and Van Gogh crudes are likely to emerge this week.

Delivered crude

Traders await Taiwan CPC Corporation’s sweet crude tender results following the dip in WTI Midland crude prices recently amid a narrower Brent-WTI spread.

Sentiment for June delivery cargoes of Brazil’s Tupi crude into Asia dimmed on the back of tepid Chinese demand. However, supply remains tight as western demand is reportedly healthy.

Crude futures

The International Energy Agency late last week warned of a potential global oil supply shock as an estimated 3 million b/d of Russian oil production likely to be shut next month due to sanctions, while buyers shun the major exporter.

In China, falling COVID-19 cases calmed investor fears of infections spiraling out of control in the world’s second largest economy. The country’s National Health Commission reported 1,656 locally transmitted cases on March 19, down from 2,157 the previous day.

In the week ended March 18, international crude oil benchmarks were lower with the May ICE Brent crude futures contract down 4.2% on the week to settle at $107.93/b, while the April NYMEX light sweet crude complex slumped 4.2% lower at $104.70/b.

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Source: Platts

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