RTRS:Middle East Crude-Dubai in steep backwardation; Oman up
SINGAPORE, Sept 12 (Reuters) - The Middle East crude market strengthened on Monday with the front-month Dubai curve at its steepest backwardation in nine months while DME Oman climbed to its highest in more than six months on expectations of strong demand in Asia.
Asian refiners are expected to ramp up output on strong refining margins and as some facilities return from maintenance, traders said on Monday. The fourth quarter is also the peak demand season for heating oil as winter arrives in the Northern Hemisphere.
The October-November spread for Dubai swaps widened to 45 cents in backwardation, against a previous high of 50 cents on Dec. 16, 2010, Reuters data showed.
Hikes in the official selling prices of similar Saudi crudes also supports Oman's valuation, pushing prompt-month cash premium for Oman OMA-1Mmog-A to the highest in more than six months.
A widening of the front-month Brent/Dubai Exchange of Futures for Swaps (EFS) DUB-EFS-1M to its highest level in nearly three months is expected to encourage Asian refiners to opt for lower-priced Dubai-related crudes from the Middle East and Russia.
November spot trade will start later this week when most of the North Asian refiners are back from holiday.
*OSPS
- Iran has raised official selling prices for October-loading crude to Asia, traders said on Monday, tracking Arab producers as demand remains firm across Asia. Continued...