Business | Oil & Gas
Dubai crude for June discount to Oman unchanged
Demand down amid drop in processing profits
- Bloomberg
- Published: 00:00 March 26, 2010
Dubai: The discount of Dubai crude for June loading versus Oman was left unchanged to May as demand for grades that yield a high amount of fuel oil declined amid a drop in processing profits for refiners.
The official selling price for Dubai crude loading in June will be set at a discount of 40 cents to the Oman futures contract for that month, according to an e-mailed statement from the Department of Petroleum Affairs yesterday.
Oman futures is the only oil contract traded on the Dubai Mercantile Exchange, which provide the differential announcement from the Dubai Department of Petroleum Affairs. The discount to Omani crude is the lowest since December 2009, when Dubai priced its oil at 45 cents below the DME-traded futures contract.
Dubai crude yields about 43 per cent of fuel oil when processed in a simple refinery, according to data from Energy Intelligence Group. Fuel oil's discount to the grade, known as the crack spread, widened to $5.30 a barrel yesterday from $3.35 a month ago, according to data from PVM Oil Associates.
The drop in fuel oil crack spreads comes as European fuel oil shipments to Asia may increase 13 per cent next month to as much as 4.5 million metric tonnes, according to a Bloomberg survey of four traders in West-to-East supply.
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