Abu Dhabi's new Murban crude futures contract started trading on the Ice Futures Abu Dhabi (IFAD) exchange today, providing a new pricing option for Mideast Gulf and other crudes flowing to Asia-Pacific. The IFAD front-month June Murban contract was trading at $62.53/bl at 4am GMT. Murban futures will be physically delivered two months ahead of the pricing month, with the June contract expiring at the end of April for physical delivery in June. The Murban futures contract will be physically delivered at Fujairah on a fob basis, with the option of a financial settlement. It will also set the official monthly export price for Murban crude. The official export prices of Abu Dhabi's other grades — Das, Upper Zakum and Umm Lulu — will be linked to the Murban official price.
Abu Dhabi's state-owned Adnoc will remove destination restrictions on all its crude export grades from June, allowing them to be freely traded for the first time. Ahead of the launch of the Murban futures contract, Adnoc deepened term export cuts for all its crude grades for loading in June, compared with term cuts for April- and May-loading cargoes. Adnoc is implementing cuts of roughly 15pc to client nominations for term supplies of its Murban crude loading in June, several traders and refiners said.
Adnoc has also issued its second monthly report forecasting the amount of Murban available for exports on a 12-month rolling basis. The company kept the forecast unchanged from the previous month, with 1.034mn b/d of Murban projected to be available for export from Fujairah and Jebel Dhanna in April, 1.001mn b/d in May and 1.04mnb/d in June. Adnoc hopes that the Murban futures contract will eventually be used to price other crudes from the Mideast Gulf and elsewhere. Adnoc's aim is for Abu Dhabi grades, and eventually other crudes, to trade on the spot market against the IFAD contract, making Murban a regional marker.