China's INE adds Murban to crude futures basket

China's Shanghai International Energy Exchange (INE) will add Abu Dhabi Murban crude to the grades that are deliverable into its crude futures contract from 1 June next year.

This is the first time the INE has added a new settlement grade since it launched the futures contract in 2018. The exchange currently list seven deliverable crudes, including Oman, Basrah Light, Qatar Marine and Upper Zakum.

The INE said today it has been considering including Murban in its basket since before it launched. The decision to add Murban is a result of "market evaluation" and the INE said it plans to continue to review and adjust each of its crudes and/or price differentials as needed.

The INE set Murban specifications at a minimum 35°API and maximum 1.5pc sulphur content, with a 5 yuan/bl ($0.76/bl) premium. The crude loading ports must be either the Fujairah terminal or Jebel Dhanna terminal in the UAE.

The INE launched its long-awaited crude futures contract in March 2018. Transaction volumes in the main contract were 162mn bl today.

The Intercontinental Exchange (Ice) plans to launch its Murban crude futures contract on 29 March 2021. The contract will be physically delivered to Fujairah on a fob basis. Light sour Murban crude has gravity of about 40.5°API and 0.8pc sulphur content.

Shanghai INE crude basket Country Grade API (min) Sulphur (max) Premium (Yn/bl) Loading port UAE Dubai 30 3 0 Fateh terminal UAE Upper Zakum 33 2 0 Zirku island UAE Murban* 35 2 5 Fujairah/Jebel Dhanna terminal Oman Oman 30 2 0 Mina Al Fahal Qatar Qatar Marine 31 2 0 Halul island Yemen Masila 31 1 5 Ash Shihr Iraq Basrah Light (level I) 28 4 -5 Basrah oil terminal or SPM Iraq Basrah Light (level II) 28 3.5-4.0 -10 Basrah oil terminal or SPM China Shengli 24 1 -5 Dongying storage *as of 1 June 2021 Source: INE

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