Middle East crude benchmarks Oman, Murban and Dubai were mixed on the last trading day of the month, though markets continued to price in weaker demand expectations in the coming months ahead of an OPEC+ meeting two days later.

Dubai’s premium recovered from the past few sessions of loss and gained to a one-week high, while Oman’s premium also rebounded from the previous trading session.

The monthly average for Dubai and Oman premiums in May slipped by 48 cents and 78 cents per barrel, respectively, compared with April, Reuters calculations showed.

Margins for a complex Singapore refinery slipped to a more than one-year low on Friday of slightly less than $1 a barrel, exacerbating downside pressures on the market.

The market is pricing in expectations of lower crude runs regionally, which will translate to lower demand, and this is possibly causing the market to weaken in the near term, two trade sources said.

The next factor to look at will be the lifting of Saudi contracts in the following week and who may end up cutting volumes, one of the sources added.

The Brent-Dubai spread, typically measured by the exchange of futures for swaps price spread, hit a new low since August last year owing to limited market liquidity at the month-end and a dip in Brent futures overnight.

“Ahead of the June 2 virtual OPEC+ meeting, markets continue to expect a rollover of producer group output cuts through 3Q’24, if not through year-end,” said Citi analysts in a client note.

OPEC+ EXPECTATIONS

OPEC+ is working on a complex deal to be agreed at its meeting on Sunday that will allow the group to extend some of its deep oil production cuts into 2025, three sources familiar with OPEC+ discussions said on Thursday.

RUSSIAN CRUDE

U.S. plans to further curb the operations of Russia’s so-called “shadow fleet” of oil tankers are unacceptable and its desire to impede Russia-China trade is part of an illegal trade war, Russian Foreign Ministry spokeswoman Maria Zakharova said on Thursday.

SINGAPORE CASH DEALS

Cash Dubai’s premium to swaps rose 32 cents to $1.66 a barrel.

NEWS

– Malaysia’s state energy firm Petroliam Nasional (Petronas) reported a near 11% decline in first-quarter net profit on Friday due to higher operating costs and lower realised prices across its businesses.

– China’s manufacturing activity unexpectedly fell in May, keeping alive calls for fresh stimulus as a protracted property crisis in the world’s second-largest economy continues to weigh on business, consumer and investor confidence.
Source: Reuters (Reporting by Trixie Yap; Editing by Devika Syamnath)