3 October 2024: 09:30 BST
Fundamentals are finally asserting themselves. Dubai has been defying gravity for a couple of months as consumer demand softens in China and other parts of Asia, while some producers in the Middle East (wink wink) exceed their OPEC production ceilings. At the start of October, average Dubai physical premiums have tumbled from their high levels in September, down to an average of $1.52/bbl, so far this month. Having remained so elevated through last month, we expect Dubai OSPs to Asia to come out stronger, somewhere in the region of $0.80-$1.00 up. But Iran’s up first, publishing its own OSPs for November and it’s been chopping harder than a hyperactive lumberjack. The Islamic Republic reduced the Iranian Light crude by 65c/bbl to +$1.70/bbl, Heavy by 65c/bbl as well, down to +$0.15/bbl, Forozan Blend is cut by 40c/bbl. Pars and Soroosh grades were both cut further into the negatives: the former cut by $1/bbl to -$1.95/bbl, and the latter to -$2.95/bbl from -$2.75/bbl. This looks like a realisation that the once golden child of demand growth, China, is having a Golden Week in an otherwise messy year.
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