The Dubai crude structure hit a fresh near six-year high Friday amid tight spot supply and active bidding for physical cargoes in the Platts Market on Close assessment process in Asia.
The Dubai cash to swap spread, an indicator of sentiment in the Middle East sour crude market, was assessed at $2.48/b Friday, up 20 cents/b on the day.
This was the highest the spread has been since November 27, 2013, when it was at $2.56/b.
Similarly, the Oman spread to Dubai swap rose 11 cents/b on the day to be assessed at $3.14/b Friday, the highest since September 18, 2013, when it was at $3.19/b.
Sentiment for Middle East sour crude cargoes has been bullish this month amid sharply reduced Venezuelan crude exports, and after the US announced in late April it was not extending waivers on Iranian sanctions, effectively barring Asian end-users, the largest buyers of Iranian crude, from any Iranian oil purchases.
Trade sources said the arbitrage for crude oil cargoes from Europe and Africa, which are typically Brent-linked, has also been difficult to work amid a widening Brent/Dubai exchange of Futures for Swaps spread. The arbitrage from the US was also mostly shut, they said.
The EFS spread was assessed at $3.05/b Friday, close to a seven-month high of $3.09/b touched Wednesday.
MOC
Amid the tight supply, Platts Asia MOC process Friday saw more active bidding from end-users for physical cargoes.
Spanish oil major Repsol had a bid for a July-loading cargo of Abu Dhabi's Murban crude which stood at the end of the MOC at a premium of 85 cents/b over the grade's OSP on a FOB basis.
Repsol also had a bid for a July-loading cargo of Abu Dhabi's Das Blend crude which stood at a premium of 80 cents/b over the grade's OSP, FOB at the end of the MOC.
Oil major BP had a bid for a July-loading cargo of Abu Dhabi's Upper Zakum crude which stood at the end of the MOC at a premium of 65 cents/b over the grade's OSP, FOB.
In comparison, prior trades for June-loading cargoes of Upper Zakum crude last month were heard done at premiums in the low-teens to its OSP, FOB, while June-loading cargoes of Murban and Das Blend were heard done at premiums of around 30-50 cents/b to their OSP, FOB.
OTC
Outside of the MOC, trades for spot cargoes were heard done at sharply higher premiums month on month. Two July-loading cargoes of Abu Dhabi's newest grade Umm Lulu were heard sold to an oil major at premiums in the range of $0.75-$1/b to its OSP, FOB. Seller details were unclear.
Last month, June-loading cargoes of Umm Lulu crude were heard traded at premiums of around 30-50 cents/b over its OSP, FOB.
A July-loading Murban crude cargo was also heard sold at a premium of around 50 cents/b over its OSP, FOB, and a July-loading Qatar Marine crude cargo heard sold at a premium of around 80 cents/b over its OSP, FOB, with both cargoes likely to Japanese end users.
June-loading Qatar Marine cargoes were heard traded last month at a premium of around 25 cents/b to its OSP, FOB.
"There is very good demand this month. You will see over OSP plus $1/b [for Murban and Das Blend] soon," one sour crude trader said.
