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|09 November, 2018

Brent crude's premium to Dubai falls to more than three-month low

A narrowing of Brent's premium to Dubai typically spurs demand for Brent-linked grades

An Emarat petrol station is pictured with the Burj Khalifa on September 7, 2015, in Dubai, United Arab Emirates.

An Emarat petrol station is pictured with the Burj Khalifa on September 7, 2015, in Dubai, United Arab Emirates.

Getty Images/Warren Little

SINGAPORE- * The premium of Brent crude futures to Middle East benchmark Dubai fell to $1.25 a barrel, the lowest since the end of July after global benchmark Brent dropped to a seven-month low on Friday, Refinitiv data showed

* A narrowing of Brent's premium to Dubai typically spurs demand for Brent-linked grades produced in the Asia Pacific and the Atlantic Basin

* However, strong freight rates have been curbing arbitrage flows from the Atlantic Basin, prompting Asian buyers to turn to sources closer to home, two traders said

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* The narrowing price spread between the two benchmarks could also depress demand for Dubai-linked grades produced in the Middle East and Russia, they said

(Reporting by Florence Tan; Editing by Christian Schmollinger) ((Florence.Tan@thomsonreuters.com; +65 6870 3497; Reuters Messaging: florence.tan.thomsonreuters.com@reuters.net))