Weekly oil outlook: Middle East to witness increased spot demand

Weekly oil outlook: Middle East to witness increased spot demand

The spread between Dubai and Brent, also known as the EFS, continued to narrow with demand for Middle Eastern (ME) crude remaining strong and with reports of Indian refiners looking to scale down purchases of Russia’s ESPO blend due to high freight rates. This is likely to raise the demand for spot Murban crude oil cargoes in the coming weeks.

Timespreads for Dubai swaps softened in the latter part of the week (September 19-25th) following the broader fall in benchmarks as economic concerns took precedence despite the market remaining tightly supplied.

Weekly crude oil exports from the Middle East and North Africa were lower at 117.6 million bbl and 17 million bbl, respectively.

ME rude found competition from arbitrage barrels, including those linked to WTI, on the back of the healthy spreads which encourage arbitrage flows.

The OPEC+ was reported to have produced lesser than the target in August with the deficit increasing from 2.89 million bpd to 3.58 million bpd, underscoring the challenge faced by some member nations to increase supplies.

The next OPEC+ meeting is scheduled for October 5, 2022.

Refinery update

India's IOC was reported to be planning maintenance of a few units over the course of the next month. The turnaround includes shutdown