Asia Crude Oil: Key Market Indicators For Nov 15-19

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Crude oil markets started the Nov. 15-19 trading week on a softer note amid demand uncertainty arising from increasing COVID-19 cases in several parts of the world.

ICE January Brent crude futures stood at $81.60/b at 0235 GMT Nov. 15, down 58 cents/b (0.71%) from the Nov. 12 settlement, says an article published in Platts.

Middle East crude

More spot tenders are expected during the week for January-loading barrels, with eyes on the outcome of Qatar Energy’s monthly tender offering Al-Shaheen and Qatar Marine crude.

Spot differentials for most Middle East grades could trade at premiums amid strong demand cues from Asian buyers for January-loading barrels.

Russia’s ESPO Blend crude could see healthy demand as buyers seek more crude supplies, though a weaker import appetite from Chinese private refiners could cap premiums for the grade.

Dubai cash/futures (M1/M3) averaged $3.78/b in the week ended Nov. 12, against $3.36/b in the week ended Nov. 5.

Intermonth spreads were narrower during midmorning trade Nov. 15 with January/February pegged at $1/b, down 4 cents/b from the Asia close Nov. 12.

January Brent/Dubai Exchange of Futures for Swaps was pegged at $4.71/b at midmorning Nov. 15, down from $4.76/b from the Asia close Nov. 12.

Asia Pacific crude

Market participants eye procurement activity from Indonesia’s Pertamina, as well as movement on the January-loading barrels of North West Shelf condensate.

Tender results on Qatar’s DFC and LSC for January-loading barrels are expected to emerge over Nov. 15-19 amid higher naphtha cracks on the month.

On Far East Russian crude, tender results for OVL’s Sokol tender are expected to emerge during the ongoing week where cash premiums for January-loading Sokol crude could remain resilient amid a wide Brent/Dubai EFS.

The January loading programs for Australia’s Ichthys Field Condensate, Cossack and Papua New Guinea’s Kutubu Blend are expected to appear over Nov. 15-19.

In Southeast Asia, traders will be looking out for Vietnam’s PV Oil’s Chim Sao and Rang Dong crude deals as well as Brunei Energy’s tender for January loading barrels of Malaysia’s Kimanis crude.

On OSPs, traders await clarity on Indonesia’s October ICP and Brunei’s September OSP this week.

Delivered crude

Trading activity on February-arrival barrels of Brazil’s Tupi crude are anticipated amid rising demand from Chinese state-owned enterprises.

A narrower M2 Brent/WTI spread could suggest thin volumes of US WTI Midland crude into Asia.

Crude futures

Crude oil futures were under pressure in midmorning trade in Asia Nov. 15, as investors continued to fret over a stronger dollar amid signs of rising inflation and a recent uptick in COVID-19 cases in Europe and China.

The latest inflation print for October in the US, a 31-year high, has raised the possibility of action by the Biden administration to tackle surging energy costs. The US Federal Reserve might also bring forward its planned start date for an interest rate liftoff.

The recovery in global mobility has stalled amid an uptick in COVID-19 cases worldwide. China continues to battle its latest outbreak of COVID-19 cases, while several European countries including Germany, Austria and the Netherlands have registered record caseloads in recent days.

Global mobility in the week to Nov. 8 averaged 9.8% below pre-COVID levels in most of the world’s top oil users excluding China, according to the latest Google data, up from 8% a week earlier.

In the week ended Nov. 12, the international crude oil benchmarks were lower on the week. The January contract for ICE Brent futures fell 0.69% on the week to settle at $82.17/b, while the December contract for NYMEX light sweet crude was down 0.59% at $80.79/b.

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Source: Platts

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