Brent crude’s premium to Dubai, the main marker grade for the Middle East and Asia, fell to the lowest in 21 months.
The Brent-Dubai exchange for swaps, which measures the European oil’s premium, fell 30 cents to $2.10 a barrel for August, the lowest level since September 2010, according to data from PVM Oil Associates Ltd., a London-based broker. The September EFS was down 23 cents at $2.35.
“The narrowing Brent-Dubai premium is a result of continued strength in the Dubai market at a time when the European market is taking a hit,” Eugene Lindell, a senior oil market analyst at JBC Energy GmbH in Vienna said today in an e-mail. “Dubai is being propped up by continued uncertainty regarding Iranian crude exports.”
Dubai crude’s backwardation, when the price for delivery now is greater than that for later, fell by 20 cents. Swaps for July were 33 cents a barrel more than September, according to PVM. The price difference, known as a timespread, has declined 76 percent in June. A narrower backwardation typically signals sufficient supply amid falling demand from refiners for prompt oil.
PV Oil Corp., Vietnam’s state-run oil-marketing company, offered to sell as much as 500,000 barrels of Dai Hung crude for loading Aug. 1 to Aug. 13, according to a tender document obtained by Bloomberg News. Bids are due tomorrow.
Qatar International Petroleum Marketing Co., known as Tasweeq, sold seven cargoes of Al-Shaheen crude for August, totaling 4.2 million barrels, at premiums of $1.10 to $1.35 a barrel more than Dubai oil, said four traders who participate in the market, asking not to be identified because the information is confidential. The buyers include Exxon Mobil Corp. and India’s Reliance Industries Ltd., the traders said.
Oman for July delivery rose 51 cents to $94.33 barrel at 12:30 p.m. on the Dubai Mercantile Exchange.
Royal Dutch Shell Plc bought all five Dubai partial cargoes sold today, according to a survey of traders who monitor the Platts pricing window. Shell purchased one of the 25,000-barrel lots from Mercuria Energy Trading SA at $94.25 a barrel, and paid $94.30 for two from BP Plc, one from Total SA and one more from Mercuria.