Benchmark Dubai crude future spreads held largely steady in mid-morning trading hours in Asia on Thursday, as market participants in Asia digested several changes from Middle East oil producers to crude pricing formulas announced over the week.
The January/February intermonth spread for Dubai crude was notionally pegged at 99 cents/b at 11 am in Singapore (0300 GMT) Thursday, unchanged from its last assessed level at 12.30 pm Singapore time (0430 GMT) on Tuesday, December 24.
Similarly, the February/March spread was pegged at 88 cents/b Thursday morning, slightly up from its assessed 86 cents/b on Tuesday.
Qatar Petroleum announced Tuesday that it will switch to prospective pricing for its crude sales from February 2020. The change follows several months of rumors and speculation from market participants in Asia, who had previously said they would welcome any move from producers in the Middle East to align pricing formulas to make it easier for buyers to compare different crude grades.
QP currently issues official selling prices for Qatar Land and Qatar Marine crude on a retroactive basis, with prices issued after the cargoes have loaded for a particular month. QP's move will bring it in line with the majority of the Middle Eastern producers, such as Saudi Arabia and Iraq, who set their OSPs on a prospective basis.
"The change to the pricing methodology will improve the overall competitiveness of Qatar Marine and Qatar Land, and allow existing and new customers to better align and compare the Qatari crude grades with other crude grades," QP said.
Additionally, Kuwait Petroleum Corp on Tuesday announced that it would change the Oman component of its current pricing formula to be based of Dubai Mercantile Exchange, rather than Platts.
KPC's prices for its crude grades headed to Asia are currently set as differentials to the average of Platts Dubai and Platts Oman crude prices in the month of loading.
The company's new formula will reflect the prices of its crude as differentials to the average of Platts Dubai and DME Oman.
"KPC strongly believes that Kuwait's crude pricing should reflect the evolving oil market fundamentals and dynamics that ultimately serve the interest of its customers," the notice said.
KPC issues official selling prices for its crude grades on a monthly, forward looking basis.
