Combined open interest for front-month December Dubai crude derivatives traded on the Intercontinental Exchange topped 100 million barrels in November, ICE data showed Tuesday.
Strong Asian demand for Middle East crude has underpinned buying interest in the Dubai contract in recent weeks, making it the sole major physical oil benchmark to remain backwardated even as a rout in global oil prices has pushed ICE Brent and NYMEX WTI deep into contango.
Traders said continued strength in residual fuel stocks, lower Iranian oil exports and the possibility of an OPEC-led production cut could continue to support the sour crude benchmark.
While liquidity in the year-end December contract is often higher than other months, but at 101.146 million barrels the open interest for front-month December 2018 contract is up by a third both from the front-month November contract in October as well as the December 2017 contract a year ago.
The Brent/Dubai Exchange of Futures for Swaps, a key indicator of ICE Brent's premium to benchmark Dubai derivatives, averaged $1.32/b in November down from $2.61/b in October, reflecting the strength in Dubai relative to other lighter grades.
Product margins for fuel oil, along with limited waivers provided for sanctioned Iranian oil has supported heavy sour crudes despite weaker global oil prices, market sources said
The Singapore high sulfur fuel oil market has been steeply backwardated amid supply tightness caused by lower arbitrage inflows, lending support to the heavier crude oil curve strength. The 380 CST December/January HSFO swaps spread touched a three-and-a-half-year high in November, hitting $11.80/mt on November 20, Platts data showed.
As of October 31, open interest for December Dubai crude derivatives in October stood at 99.746 million barrels, ICE data showed.
Open interest for the front-month Dubai outright futures contract rose 37.74% to 59.874 million barrels as of November 30, compared with 43.470 million barrels as of October 31, ICE data showed.
Front-month Dubai contracts traded in October reflect contracts for November settlement, while those traded in November reflect contracts for December settlement.
Open interest for Dated Brent versus Dubai first-line contract for December settlement also increased by 72.28% at 12.835 million barrels as of November 30 as compared with 7.45 million barrels for the November settlement contract as of October 31.
The Dated Brent versus Dubai first-line contract settles against the calendar-month average of Platts Dated Brent versus the calendar-month average of Platts Dubai crude assessments.
Open interest for the Brent first-line versus Dubai first-line futures spread derivatives also continued its uptrend, rising by 14.11% to 28.437 million barrels for contracts due for settlement in December, ICE data showed.
The Brent first-line versus Dubai first-line contract settles on the difference between the daily settlement price for ICE Brent first-line futures and the Platts daily assessment price for first-line Dubai.
Total volume of trades for ICE Dubai contract was around 618,589 lots in November, compared with 582,003 lots traded in October, ICE data showed.
OPEN INTEREST FOR FRONT-MONTH OMAN CRUDE
Meanwhile, open interest for front-month January Oman crude futures traded on the Dubai Mercantile Exchange fell 11.7% month on month to 20.506 million barrels as of November 29, from 22.228 million barrels as of October 30, DME data showed Tuesday.
Front-month Oman contracts in October reflect contracts for December settlement, while those traded in November reflect contracts for January settlement.
Open interest for the front-month December Platts Dubai crude oil futures contract traded on the DME ticked up 34.1% month on month to 2.212 million barrels as of November 29, compared with 1.65 million barrels for the November settlement contract as of October 31.
