Prompt intermonth spreads for benchmark Dubai crude widened mid-morning trade Jan. 29, with demand outlook for April-loading cargoes remaining a concern.
At 11 am in Singapore (0300 GMT), the March/April Dubai time spread was valued at 27 cents/b, up 2 cents/b from the Asia close Jan. 28, S&P Global Platts data showed.
The April/May Dubai intermonth spread was pegged at 38 cents/b, also up 2 cents/b from the previous day, the data showed.
With trade for April-loading cargoes starting next week, the market hopes for better demand cues from key Asian buyers.
Major Asian economies continue to struggle with the COVID-19 pandemic, which has slashed product demand subsequently lowering crude oil importing appetite.
The focus is on China which has seen limited demand for crude oil this month as fresh COVID-19 cases have reduced domestic consumption, traders said.
"Thailand may buy its regular quantities though. Situation is not the best but its gradually improving with more schools and businesses set to open from next week," said a trader with a South East Asian refinery.
Apart from poor oil demand, concerns also linger on arbitrage crude from the West which has been increasingly preferred by Asian refiners recently due to economical viability.
"Middle East crude only makes up around 50% of Thailand's imports. The rest is largely regional crudes and arbitrage crudes from USA and West Africa," said the trader.
The front-month Brent/Dubai Exchange of Futures for Swap was valued at $1.22/b at 11 am (0300 GMT) in Singapore on Jan. 29, up 10 cents/b from the Asian close on Jan. 28, 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 to Brent-linked ones.
