The April OSP for Murban was set at $93.99/b, up $8.88/b from the March OSP, the company said in a March 5 pricing letter.
For Upper Zakum crude, which is similar in quality to medium, sour Russian Urals, ADNOC widened its discount to the Murban OSP to $2.05/b, down from a $1.55/b discount in March, for an equivalent of $91.94/b.
ADNOC set the April OSP differential for Umm Lulu at a 5 cent/b premium to the Murban OSP, unchanged from March, for an equivalent of $94.04/b.
The April differential for Das Blend was set at a discount of 40 cents/b to the Murban OSP, unchanged from March, for an equivalent of $93.59/b.
The new OSPs come after OPEC and its allies, including Russia, on March 2 decided to stick to their previously agreed plans for a 400,000 b/d production increase for April, saying the oil market was “well-balanced,” despite widespread refusals by traders to purchase Russian crude or deal with Russian counterparts due to western sanctions imposed on Moscow’s financial sector.
Crude prices have surged due to the escalating Ukraine crisis. S&P Global Commodity Insights assessed the Platts Dated Brent benchmark on March 4 at $120.33/b, the highest in more than nine years, while Murban physical crude was assessed at $110.84/b.
The spot market has led the futures market, with front-month ICE Brent futures closing March 4 at $118.11/b, while IFAD Murban futures closed at $110.73/b.
ADNOC has largely allocated full term volumes to Asian buyers over the last few months, according to market sources, with some asking for incremental supplies. Producers have been reluctant to grant the incremental volumes, with the spot market yielding higher premiums, traders have said.
Monthly averages
ADNOC and ICE launched the UAE-based IFAD — on which the Murban futures contract and 18 cash-settled derivatives and inter-commodity spreads trade — on March 29, 2021.
OSPs for Murban exports are based on the monthly average of the IFAD Murban Singapore marker first line futures, which go to delivery two months ahead of the month of trade.
OSPs for Upper Zakum, Das Blend and Umm Lulu are set as a differential to Murban OSP a month prior to loading.
The ICE Futures Abu Dhabi Exchange Singapore marker price for April Murban crude futures closed at $99.13/b Feb. 28, the last trading day for the contract.
The average of the Singapore marker price for IFAD April Murban futures in February was $93.991/b, compared with an average of $85.109/b for the March Murban contract in January.
The April IFAD Murban differential to April Dubai futures averaged $5.97/b in February, according to S&P Global data. The spread reflects IFAD Murban Singapore minute marker premium to same-month Dubai crude futures timestamped at the IFAD Singapore close.
In January, the March Murban contract averaged a premium of $3.83/b to March Dubai futures.
