Middle East crude benchmarks Oman, Dubai and Murban extended gains for a second straight session on Thursday, with the East-West arbitrage spread almost at a three-month high on strong performance in the West, though open window activity thinned significantly.
The cash premiums for Oman to Dubai swaps were at a two-month high, while Dubai and Murban were at a one-week high.
Support came from the overnight stronger performance in the west of Suez markets, some traders said, adding that there is some 2-3 days of delay in loadings of U.S. crude cargoes to northwest Europe.
Gains in Asian prices and premiums were a knee-jerk reaction, one source said, adding that Asian fundamentals have not changed that much and it was evident that liquidity turned thin in the open trading market.
The exchange of futures for swaps (EFS) value closed the trading session at $1.85 a barrel, making it more lucrative for sellers of Dubai crude to send it over to the West.
Some concerns remained on the weak spot cash markets for the gasoil and gasoline sector, which could cap crude market strength in the near term.
RUSSIA CRUDE:
India’s state refiners are jointly negotiating a long-term oil import deal with Russia, a government source aware of the development said on Thursday.
Freight rates to ship Russian oil have fallen this month towards parity with those for other global exporters for the first time since 2022 as more tankers were available despite Western sanctions and exports fell, three sources said on Wednesday.
SINGAPORE CASH DEALS
Cash Dubai’s premium to swaps rose 13 cents to $1.80 a barrel.
NEWS
– OPEC stuck to its forecast for relatively strong growth in global oil demand in 2024 and next year, saying on Wednesday that resilient economic growth and air travel would support fuel use in the summer months.
– About 1.5 million customers remained without power in Texas on Wednesday, two days after Hurricane Beryl raked the state, as progress to restore electricity was slow, hampering efforts to quickly restart critical oil infrastructure.
Source: Reuters (Reporting by Trixie Yap; Editing by Susan Fenton)