DME Oman hits six-month high
SINGAPORE, July 8, 2015
The Middle East crude market strengthened further, with DME Oman rising to its highest premium in more than six months against Dubai swaps.
Dubai's strength also closed its gap with global benchmark Brent to the narrowest in more than five years. Brent-Dubai Exchange of Futures for Swaps (EFS) for August was valued at 61 cents a barrel, down 36 cents from Tuesday's close and the narrowest since June 14, 2010, according to Reuters data.
The strength in Middle East crude benchmarks is likely to deter Asian refiners from buying more oil from the gulf. Instead, this could boost demand for oil produced in the Asia-Pacific and the Atlantic Basin, traders said.
In the Dubai swaps market, prompt intermonth spreads have also strengthened to reflect a stronger market.
The August-September spread narrowed 7 cents a barrel to 39 cents in backwardation, Reuters data showed. September-October spread moved close to parity at 7 cents in contango, 16 cents narrower than Tuesday.
Traders were still waiting for more official selling prices from Qatar, Iraq, Kuwait and Iran.
Iran and major powers gave themselves at least until Friday to negotiate an agreement on the Iranian nuclear programme, but a source from one of the powers said on Tuesday they had to wrap up in the next 48 hours.
DME OMAN
DME Oman for September settled at $55.85, down 58 cents. This puts DME Oman at 65 cents a barrel above Dubai swaps, the highest since November last year, against a premium of 24 cents on Tuesday.
--Reuters
