Dubai futures contango widens as weak refining margins weigh on outlook

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New York —
The contango in Dubai crude futures widened in mid-morning in Asia Aug. 13 as weak margins for products were expected to deter uptake for crude in the .

The /October Dubai crude futures spread was pegged at a contango of 51 cents/b at 11 am Singapore time (0300 GMT) Aug. 13, widening 6 cents/b from the Asia close Aug. 12, S&P Global Platts data showed.

Meanwhile, the October/November spread was pegged at a contango of 37 cents/b at 0300 GMT, widening 1 cent/b over the same period.

“Demand is very low for oil products, refining margins are not improving, so it will be hard for the market to be stronger,” a source from a Japanese refiner said.

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Weak demand have dragged the sour crude complex lower, with the Dubai cash/futures spread sliding further in August, Platts data showed.

October cash Dubai was assessed at a discount of 69 cents/b to same-month futures on Aug. 12, falling 8 cents/b day on day, and down sharply from a discount of 38 cents/b on Aug 3.

Product cracks for key transport fuels like gasoline and jet remained lackluster owing to little improvement in the COVID-19 situation, trade sources said.

The second-month 92 RON gasoline swap crack to Dubai swap has averaged $1.90/b to date in August, down from $2.62/b in July, Platts data showed Aug. 13.

The second-month jet fuel swap crack to Dubai swap has averaged $1.24/b to date in August, down from $2.47/b in July, the data showed.

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Jeslyn Lerh

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Wendy

Oil

Source: Platts

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