ASIA CRUDE OIL: Key market indicators for June 27 – July 1

Oil prices are expected to trade rangebound in the week ended July 1 as conflicting signals of recessionary fears and a supply crunch is likely to keep prices in a tight range.

Front-month August ICE Brent crude futures stood at $113.07/b at 0218 GMT June 27, down 5 cents/b (0.04%) from the June 24 settlement.

Middle East Crude

** Trade activity for August-loading crude is expected to slow down though some end month demand could emerge this week.

** Focus will move to the next cycle starting July 1 with discussions commencing on the expected increase in official selling prices by Saudi Aramco and other Middle East producers.

** Demand for light sour Murban crude will be closely watched this week as prices hit a record high on June 24. Healthy appetite for light sour grades and its products could see prices move higher this week.

** Market participants will also watch the upcoming OPEC+ meet on June 30 where the alliance will discuss its August output after promising to increase production by 648,000 barrels. There is, however, some skepticism in the market that the alliance may not be able to meet its promised output hike amid production constraints and underinvestment.

** Dubai cash/futures (M1/M3) averaged $7.48/b in the week ending June 24, against $7.58/b in the week ended June 17.

** Intermonth spreads were stable at mid-morning trade June 27 with August-September pegged at $3/b, wider by 10 cents/b from the Asia close June 24.

** August Brent-Dubai Exchange of Futures for Swaps was pegged at $12.09/b at mid-morning June 27, up 8 cents/b from the Asia close June 24.

Asia Pacific Crude

** Market participants will monitor trading activities for August-loading barrels of Australia's North West Shelf condensate amid some recovery in naphtha cracks and emerging demand.

** For regional medium sweet crudes, traders will look out for any further trades for August-loading barrels across Malaysia's MCO crude basket.

** On heavy sweet crudes, clarity on the loading program and trading activities for Australia's heavy sweet crudes Vincent, Pyrenees and Van Gogh are expected to emerge this week.

** On official selling prices, traders await Malaysia's June MCO OSP and Brunei's May OSP.

Delivered Crude

** Trading activities for September delivery barrels of US WTI Midland crude will be in focus following recent rise in UAE's Murban prices.

** China's demand for September-delivery barrels of Brazilian Tupi crude remained lukewarm, however, market participants await trading activities amid higher Chinese refinery run rates.

Crude Futures

** Despite the strong downward pressure seen in recent weeks, both ICE Brent and NYMEX crude benchmarks managed to close out the previous week ended June 24 mostly unchanged after a rally of more than $3/b in the previous session June 24.

** Analysts said the rebound was likely induced by reports of record power demand in parts of China as several regions battle a heatwave, as well as signs that the sell-off in crude oil prices was overdone.

** The backwardation in the M1-M2 ICE Brent spread had jumped by 43 cents/b on the day to settle at $4.02/b at the June 24 close, a high not seen since May 31. On the week, the M1-M2 spread was up by $1.29/b, while the August ICE Brent crude was unchanged over the same period.