Dubai crude was buoyantly traded, pushing its premium over WTI to the highest since late March, agency data showed.
Across the Middle East, crude oil sold by Persian Gulf producers has become expensive after OPEC+ producer Saudi Arabia raised prices, and freight rates to Asia climbed.
As of 4:30 p.m. Singapore time on Wednesday, Dubai crude swaps traded $3.65 a barrel above U.S. WTI benchmark futures.
This spread has typically been less than $3/bbl in recent weeks.
Prices for U.S. West Texas Intermediate Midland crude for delivery to the Far East are competitive with Middle Eastern crudes such as Abu Dhabi’s Murban, both of which are cheaper for delivery than Dubai crude, traders said. A barrel premium of $3 to $4.
However, the final cost of cargo delivery is vulnerable to fluctuations in Dubai’s strength relative to WTI crude oil, freight rates, and cargo spreads, thereby affecting arbitrage.
