The Middle East sour crude complex weakened Monday with the contango in the prompt Dubai crude futures lower as indications for physical cargo deals continue to be reported in discounts.
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The March/April Dubai crude futures spread, which had been assessed at minus 15 cents/b at the 0830 GMT Asian close on Friday, was pegged at minus 21 cents/b at 11 am Monday (0300 GMT) in Singapore.
Similarly, the April/May spread was pegged at a backwardation of 12 cents/b Monday morning, down from 22 cents/b backwardation assessed at Friday’s close.
The intermonth spreads weakened as physical Dubai values versus futures fell to a 2 1/2-year low at the Asian close on Friday, reflecting weaker demand in Asia, particularly from the biggest buyers in North Asia amid turnarounds, weak refining margins and also coronavirus-related impact to demand.
April cash Dubai spread to same-month Dubai futures fell for the fourth consecutive day to minus 46 cents/b at the Asian close on Friday. The spread was last weaker on August 1, 2017 when it was assessed at minus 49 cents/b, S&P Global Platts data showed
April-loading cargoes of Middle East crude oil have traded in deep discounts versus their official selling prices as well as versus Dubai this month, market participants have noted.
Recently, Taiwan’s CPC was reported to have bought a singular cargo of medium sour Upper Zakum crude, likely at a discount to Dubai, market sources said.