Benchmark Dubai crude future spreads held largely steady in mid-morning
trading hours in Asia on Thursday, as market participants in Asia
digested several changes from Middle East oil producers to crude pricing
formulas announced over the week.
The January/February intermonth spread for Dubai crude was
notionally pegged at 99 cents/b at 11 am in Singapore (0300 GMT)
Thursday, unchanged from its last assessed level at 12.30 pm Singapore
time (0430 GMT) on Tuesday, December 24.
Similarly, the February/March spread was pegged at 88 cents/b
Thursday morning, slightly up from its assessed 86 cents/b on Tuesday.
Qatar Petroleum announced Tuesday that it will switch to prospective
pricing for its crude sales from February 2020. The change follows
several months of rumors and speculation from market participants in
Asia, who had previously said they would welcome any move from producers
in the Middle East to align pricing formulas to make it easier for
buyers to compare different crude grades.
QP currently issues official selling prices for Qatar Land and Qatar
Marine crude on a retroactive basis, with prices issued after the
cargoes have loaded for a particular month. QP's move will bring it in
line with the majority of the Middle Eastern producers, such as Saudi
Arabia and Iraq, who set their OSPs on a prospective basis.
"The change to the pricing methodology will improve the overall
competitiveness of Qatar Marine and Qatar Land, and allow existing and
new customers to better align and compare the Qatari crude grades with
other crude grades," QP said.
Additionally, Kuwait Petroleum Corp on Tuesday announced that it
would change the Oman component of its current pricing formula to be
based of Dubai Mercantile Exchange, rather than Platts.
KPC's prices for its crude grades headed to Asia are currently set
as differentials to the average of Platts Dubai and Platts Oman crude
prices in the month of loading.
The company's new formula will reflect the prices of its crude as differentials to the average of Platts Dubai and DME Oman.
"KPC strongly believes that Kuwait's crude pricing should reflect
the evolving oil market fundamentals and dynamics that ultimately serve
the interest of its customers," the notice said.
KPC issues official selling prices for its crude grades on a monthly, forward looking basis.
