April 06, 2020 [S&P Global Platts – Published on April 3, 2020] – Values for cash Dubai and Oman crude contracts rose from record lows Friday, amid calls for an extraordinary meeting by OPEC+ members to address multi-year low oil prices and excess global oil production.
June cash Dubai’s discount to June futures was up 92 cents/b day on day to be assessed at minus $7.76/b.
Thursday’s cash/futures spread was assessed at minus $8.68/b, the lowest on record for the contract, with crude market sentiment nosediving in tandem with the end of the latest OPEC+ production cut agreement on March 31.
June cash Oman rose in step with Dubai Friday, up to minus $7.76/b against June Dubai futures after rising 88 cents/b on the day.
Saudi Aramco, initially expected to issue official selling prices around April 5 for its crude oil loading over May, could delay the OSPs until after the OPEC+ meeting is concluded, market participants said.
A survey of Middle East crude buyers in Asia earlier this week by S&P Global Platts found expectations for Saudi Arab Light crude to be cut in a range of $1.50-$4/b for May loading cargoes headed to Asia.
The survey results called for OSPs to be reduced over and above hefty cuts already provided by producers last month.
“Considering the economics of other arbitrage cargoes, Arab Light should be cut by $3/b, but it all depends on Saudi Arabia’s intentions,” one survey participant said.
This month, Middle East producers will release OSPs for cargoes scheduled to load in May.
The OPEC+ alliance plans an extraordinary meeting Monday via webinar to try and broker a deal on production cuts, according to delegates, following mediation by US President Donald Trump this week between Saudi Arabia and Russia on their oil price war.
However, Russian energy minister Alexander Novak has yet to confirm his participation.
The OPEC secretariat and Saudi energy minister Prince Abdulaziz bin Salman are coordinating the meeting, the delegates said.
No time has yet been set, and it was unclear if countries outside the OPEC+ coalition were invited.
Crude traders in Asia questioned tangible elements of any future production cut agreement, and wondered if the US would be looped in alongside Saudi Arabia and Russia.
“It is unclear if they [the US] will join in this cut,” a trader said.
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