The crude market in Asia started the week lower mid-morning on June 15 ahead of an expected uptick in spot trading activity for August-loading Middle East crude cargoes week ending June 19.
August ICE Brent crude futures stood at $37.82/b at 0300 GMT on June 15, down 37 cents/b from $38.19/b the 0830 GMT close in Asia on June 12.
MIDDLE EAST CRUDE
**August Dubai derivative fell 44 cents/b from the Asian close on June 12 to around $37.39/b on the morning of June 15, amid lower global crude oil prices.
**Intermonth spreads were mixed mid-morning June 15 with the July/August spread pegged at 2 cents/b and the August/September spread pegged at minus 21 cents/b. This compares to 3 cents/b for July/August and minus 27 cents/b for August/September at the Asian close on June 12.
**Brent/Dubai Exchange of Futures for Swaps was pegged at 36 cents/b at mid-morning on June 15, steady from the Asian close on June 12.
**Spot trade activity for August-loading Middle East crude cargoes is expected to pick up during the week of June 15 following the issuance of Middle East crude official selling prices - which were raised overall - in the week ended June 12.
**Market participants will be looking out for key tenders including one from Qatar for Al-Shaheen crude, among others.
**Key Middle East sour crude market indicator, the Dubai cash/futures spread, remained in backwardation for the second consecutive week, although the spread had eased to a one-week low of 62 cents/b on June 12 after peaking at a four-month high of 96 cents/b on June 9 amid easing market sentiment ahead of the issuance of allocations for July-loading barrels from Middle East producers.
**Still, the spread averaged $0.76/b for the week of June 8-12, Platts data showed. The same spread averaged $0.41/b for the week of June 1-5.
ASIA-PACIFIC CRUDE
**In the condensate market, traders will be looking out for the results of Qatar Petroleum's tender offering August loading DFC and LSC which are expected to trade as high as minis $3-$4/b to Platts Dubai, FOB.
**Market participants would also be looking out for the results of the second tender by India's ONGC offering August loading Sokol crude, particularly after the first tender traded at premiums close to a four-month high of $3.70/b to Platts Dubai on a CFR basis.
**More Vietnamese grades are expected to be concluded in the week beginning June 15, including for grades include Bach ho Light and Thang Long. With the domestic refiner Binh Son Refining shut for maintenance, traders will be looking to see will be sufficient spot demand for these grades this month.
**August-loading Malaysian crude cargoes are also expected to trade in the spot market in the week beginning June 15. With around 10 Kimanis cargoes expected to load in August as compared to five in July, additional supply might cap the strength in price differentials, traders said.
DELIVERED CRUDE MARKET
**In the delivered market, discussions for Brazilian Lula crude were heard at around low $3s/b to November ICE Brent Futures for September delivery cargoes. Market participants expect spot deals for this grade in the week beginning June 15.
**Market participants would be looking out for the tender results of Indian Oil Corporation's tender result seeking US crude to see if they buy any US WTI Midland crude for Q4 2020 and Q1 2021 delivery, traders said.
CRUDE FUTURES
**OPEC+ supply cut extension provided an initial boost of optimism, but bullish sentiment fades amid a resurgence of COVID-19 cases in the US.
**Market remains concerned over the pace of demand recovery, amid an unexpected stock build in US crude inventories.
**Brent swaps contango looks set to remain largely stable in the near-term. The prompt Brent swaps July/August timespread averaged minus 26 cents/b at the Asian close in the week ended June 12, according to Platts data.
**Investors continue to monitor COVID-19 developments amid the reopening of several city states across the globe, with fears remain of a resurgence in new cases.
