Crude/Condensates: Mar 29-Apr 2: Murban futures trade on IFAD starts
Trade for Murban futures on the ICE Futures Abu Dhabi (IFAD) started on Mar 29. Average marker prices of the June IFAD Murban contract in Singapore would be adopted as the June-loading OSP. The Murban OSP set on the IFAD would be benchmark prices for other Abu Dhabi OSPs for Umm Lulu, Das and Upper Zakum, so that market players were closely monitoring the price trends on IFAD. Meanwhile, end-users in Japan and China preferred to gauge the price trends on IFAD. They generally kept a wait and see stance and were so far cautious of trading IFAD aggressively. This was partly because of higher financing costs regarding credits for IFAD Murban trade.
Crude production in Libya was steadily increasing and the current production levels in the country hovered at around 1.20 mil barrels per day (b/d). Production recovered steadily after export terminals and production facilities were released from militant groups in September 2020. Libya was exempt from the joint production cut deal by OPEC plus, which also contributed to the increase in the production. "Demand in Europe is sluggish due to spreading COVID-19, and rising production in Libya makes already abundant supplies for African and Mediterranean grades more serious and demand/supply is deteriorating," said a trader in Singapore.
Asia Pacific Crude
May-loading Australian NWSC weakened further. While crack margins for naphtha worsened in Asia, condensate demand weakened. US Chevron sold 650,000 bbl of NWSC for late May-loading by middle of this week. The buyer was said to be US ExxonMobil but the price was said to be at a discount of mid/high-$1s to DTD Brent. Meanwhile, Indonesia's state-run Pertamina, a major end-user of condensates like NWSC, has not issued a May arrival condensate buy tender for the country's petrochemical TPPI so far. Some market players questioned whether Pertamina issues a buy tender for TPPI due to a fire at Pertamina's Balongan refinery.