Intermonth spreads for Dubai crude futures were little changed at midday Sept. 23 from the previous session, but trade sources said downside risk continues to linger, especially for the spot market.
At 0400 GMT (12pm Singapore time), the October/November timespread was pegged at a contango of 14 cents/b, narrowing 3 cents/b from the Asian close Sept. 22, S&P Global Platts data showed.
The November/December timespread was pegged at a contango of 22 cents/b, also narrowing 3 cents/b over the same period.
Both spreads have been rangebound in contango in recent days amid a lack of fresh drivers, but sources said that the overall sentiment was still bearish.
Market fundamentals have showed little sign of improvement this month, with demand remaining on the quieter side.
Uptake from key end-user markets like China and India was tepid for the November cycle, with Japan heard to be the main buyer for November-loading sour crude.
“Demand is not good this month and the market could come off after the activity last week,” a source from a Northeast Asian refiner said.
China’s domestic margins remained weak and this has deterred any excessive uptake of crude for refining.
Meanwhile, refiners in India bought more cargoes last month due to more competitive prices, but have retreated to the sidelines this month as their requirements have been covered.