Backwardation in the Dubai crude futures widened in mid-morning trade on July 15, with September-loading cargoes of Al-Shaheen crude heard to have changed hands ahead of the closure of a key tender from Qatar later in the day.
The August/September Dubai futures intermonth spread was pegged at 22 cents/b backwardation at 11 am Singapore time (0300 GMT), up from 18 cents/b at the Asian close on July 14, S&P Global Platts data showed.
The September/October spread was pegged stable at 3 cents/b backwardation, 1 cent/b higher than the 2 cents/b premium at the previous day's Asian close.
The intermonth spreads strengthened amid talk that a few September-loading cargoes of Qatar's Al-Shaheen crude have changed hands prior to the conclusion of Qatar Petroleum for the Sale of Petroleum Products, or QPSPP, tender for the crude which closed on July 14 and remains valid until July 15.
The monthly tender, in which QPSPP offered two 500,000-barrel cargoes of Al-Shaheen crude for loading over September 1-2 and September 28-29, is typically seen as a curtain raiser for spot trading activity in the Middle East crude market.
Market participants noted that a few September-loading cargoes of the crude have been sold pre-tender at premiums of around $1.60s/b to Dubai on FOB basis.
"Though this may be pre-tender level, it is definitely higher then I anticipated. [It could] just [be] a jittery buy, [with buyer] moving ahead of market," said a Singapore-based crude trader.
In comparison, QPSPP in June sold via tender two similar-sized Al-Shaheen crude cargoes for August loading at premiums averaging around $1.56/b to Dubai.
Meanwhile, OPEC raised its forecast for 2020 oil demand by 130,000 b/d to 90.7 million b/d from its June forecast due to slightly better-than-expected oil demand from the members of Organization for Economic Cooperation and Development in the second quarter, it said in a monthly report July 14.
The uptick in its oil demand forecast comes at a time when compliance with the OPEC+ supply agreement among OPEC members reached 112% in June, higher than the 99% recorded for participating non-OPEC nations, resulting in overall compliance of 107%, according to analyst reports.
Tracking an upward direction in Brent futures, the September Dubai swap was pegged at $42.50/b as of 0300 GMT July 15, up 87 cents/b from the Asian close on July 14.
The September Brent/Dubai Exchange of Futures for Swaps, meanwhile, was pegged at 59 cents/b, wider than the 53 cents/b assessed at the Asian close on July 14, Platts data showed.
