SAWT BEIRUT INTERNATIONAL

| 19 April 2024, Friday |

Murban crude to become popular among Asian buyers

Abu Dhabi’s new commodity benchmark based on its flagship Murban crude is expected to become popular among Asian buyers, according to analysts.

The benchmark enjoyed a decent start to trading, opening at $63.45 per barrel compared with S&P Platts closing assessment price of $62.40 per barrel on Friday following its launch on the ICE Futures Abu Dhabi exchange on Monday.

“We would see an uptake from Asia and obviously Middle Eastern concerns,” said Stephen Innes, chief global market strategist at Axi.

Murban, which accounts for half of Adnoc’s production, with outflows to Japan, China and India, could be a “great vehicle” for Asian refineries to hedge, he said.

Thus far, Middle Eastern crude has largely been priced using the Platts Dubai and Oman crude oil benchmarks.

The ICE Murban Crude Oil Futures contract will be based on a two-month delivery period, with the first contract for June delivery expiring at the end of April.

The June contract was up 0.8 per cent on volumes of 767,000 bpd, according to data from Intercontinental Exchange, which operates IFAD.

Contracts for July and August are also trading 0.85 per cent higher with volumes of 276,000 bpd and 183,000 bpd, respectively.

“A look at the last price volume data for the June and other three series month indicate decent market participation on the first day,” said Vijay Valecha, chief investment officer at Century Financial in Dubai.

Around 6,324 lots of Murban crude futures were traded by 5pm UAE time. Murban’s June contract moved in line with Brent, the international benchmark, and was down 0.19 per cent, trading at $63.38 per barrel at 5.56pm UAE time.

Brent, under which two-thirds of the world’s oil is traded, was down 0.94 per cent at $63.96 per barrel at 5.43pm UAE time. West Texas Intermediate, which tracks US crude grades, was down 0.80 per cent at $60.48 per barrel.

Murban’s futures launch on Monday signaled it was “high time” that a new benchmark for this region came into existence to dominate the oil trading circles, Valecha said.

The establishment of IFAD, the Abu Dhabi Global Markets-based exchange on which Murban is traded, is backed by companies that include the UAE’s biggest oil importers in Asia.

“You’re seeing big partners come in, including the likes of BP, Vitol… PetroChina is involved… [South Korea’s GS] Caltex, even Thailand’s PTT. This is [a] reflection in the quality of the code itself,” said Innes.

Other partners of the exchange include Japan’s Eneos and Inpex, France’s Total and Anglo-Dutch major Shell.

    Source:
  • The National News