Middle East benchmark Dubai's discount to ICE Brent futures narrowed in Asia trading Dec. 15 amid signs of robust demand from Asian refiners.
The front-month Brent/Dubai Exchange of Futures for Swaps was valued at 91 cents/b midmorning in Singapore on Dec. 15, narrowing 13 cents/b from $1.04/b at the Asian close on Dec. 14, S&P Global Platts data showed.
The Brent/Dubai EFS is a key indicator of the spread between light, sweet and heavy, sour crudes, and a wide EFS makes crude priced against Dubai more economically attractive for Asian refiners compared with Brent-linked ones.
Trade activity has picked up sharply in the week started Dec. 13 with several buyers and sellers issuing tenders for spot crudes.
"Trade cycle for February is a naturally shorter one, so all more tenders may be issued this week itself," said a trader with a north Asian refiner.
Chinese refiner Rongsheng issued a tender with an option to purchase light, medium and heavy crude oil grades from various sources. The tender closes Dec. 15 with validity until Dec. 16.
India's state-run refiner MRPL issued another tender for 1 million barrels of high sulfur crude for February 2021 delivery. The tender closes Dec. 16 and is valid until Dec. 18.
MRPL had issued a similar tender in the week ended Dec. 12, and was heard to have purchased 1 million barrels of West African crude for February delivery. However, this could not be immediately verified.
Iraq's SOMO issued a tender offering 1 million barrels of Basrah Light crude. The tender closes Dec. 16 and is valid until Dec. 17. Malaysia's Petronas also issued a tender to sell 2 million barrels of Basrah Light crude loading in January 2021.
While the buying momentum from India and China has sustained, fresh demand from other Asian buyers is adding to the market strength, traders said.
Thailand's IRPC was heard to have issued a tender for purchase of sweet and sour crudes. Tender details were yet to be ascertained.
The backwardation in the Middle East Dubai crude futures market was largely steady midmorning in Asia Dec. 15.
At 0300 GMT Dec. 15, the January/February spread was pegged at 31 cents/b compared with 33 cents/b at the Asian close on Dec. 14, S&P Global Platts data showed.
