Benchmark Dubai crude futures fell in mid-morning trade in Asia June 12 tracking global crude oil prices, but sentiment still remained largely upbeat as participants welcomed returning demand from Asia.
At 11 am in Singapore on June 12 (0300 GMT), August Dubai futures was pegged at $37.17/b, down 6.9% from the 4.30 pm Singapore close (0830 GMT) on June 11, S&P Global Platts data showed.
Similarly, August ICE Brent futures fell 7% over the same period to be pegged at $37.55/b at 0300 GMT on June 12, causing the Brent/Dubai Exchange Futures for Swaps spread to narrow to 38 cents/b in the morning of June 12 from 48 cents/b at the close on June 11.
Despite the lower futures prices mid-morning on June 12, sentiment for the physical Middle East crude market remained steady.
"At least demand is coming back - India, Japan and Korea [are] all back. China's demand is good as well, although [refining] margin is poor as usual," said a North Asian crude trader.
"[Margins are] all negative, but [refineries] still need to produce," the trader added.
Earlier this month, Indian Oil Corp., India's country's largest state-run refiner, raised crude throughput to 80% levels at its nine refineries after cutting its overall run rate by 25%-30% following the nationwide lockdown which came into force in March, company officials said.
Lockdown measures have also eased in Japan and South Korea with Japan's crude throughput rose 5.3% week on week to 1.92 million b/d over May 31-June 6, and its refinery utilization rates also increased from 51.8% a week earlier to 54.5% of overall capacity, the Petroleum Association of Japan said on June 10.
China's crude oil imports have jumped 19.2% on the year to an all-time high of 11.34 million b/d, or 47.97 million mt in May, preliminary General Administration of Customs data released June 7 showed.
Intermonth spreads for Dubai crude futures also eased, indicating a softening of market structure for Middle East crudes in Asia.
The July/August Dubai crude futures spread was pegged at 4 cents/b at 0300 GMT June 12, slightly down from 6 cents/b assessed at the Asia close on June 11. The August/September spread also eased to minus 25 cents/b in the morning of June 12, down from minus 21 cents/b assessed June 11.
