Dubai-LOOP Sour spread shows open arbitrage east: In the LOOP

The Platts Dubai-LOOP Sour spread has widened to a little more than $3/b so far in February, suggesting an improved and opened arbitrage for US Gulf Coast medium sours grades to head to Asia. The 10-day moving average spread between second-month Platts Dubai and front-month Platts LOOP Sour was $3.17/b Monday, with LOOP Sour the lower-valued of the two crudes. That compares with a January average spread of about $2.06/b and a Q4 2017 spread of $1.57/b. As Dubai’s premium over WTI increases, WTI-based medium sour grades become more competitive in export markets with comparable Dubai-based Middle Eastern grades. The spread is thus indicative of the market for USGC medium sour grades in Asia. Refinery maintenance season in the USGC has pushed down regional demand for LOOP Sour and other domestic medium sour grades. Regional sour benchmark Mars has fallen 60 cents/b since the start of February to be assessed at WTI cash minus $1.65/b on Monday. Tanker rates for ships sailing from the USGC have moved lower during the past month, adding further competitive advantage to domestic sour grades heading east. S&P Global Platts assessed VLCC tankers sailing a Caribbean-Singapore run at lump sum $3.6 million Monday. The US Gulf Coast-Singapore run is valued at… continue reading

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Source: CTRM Center

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