Middle East market to be active after OSPs

Middle East crude trade for September barrels is set to become active as refiners begin drafting loading programmes after the release of official selling prices of major exporters such as Saudi Arabia, traders said.
Top oil exporter Saudi Arabia has raised its August official selling prices (OSPs) for Arab Medium and Arab Heavy grades to Asia by more than market expectations, backed by stronger fuel oil prices.
Arab Heavy crude was set at a discount of $4.30 a barrel to the Oman/Dubai average, up 50 cents from July, topping the most bullish expectation in a Reuters survey this week. "The reason that Arab Medium and Heavy rose more than expected is because the Arab Light price did not drop," a trader said. "Dubai's physical value had been dropping, so I think AL (Arab Light) price should have been cut." Qatar has raised its June retroactive official selling price (OSP) for Qatar Marine crude to $65.45 a barrel, up $1.18 from May.
That would put the medium heavy crude at a 15-cent premium to the Oman OSP, marking the second-straight month that it was set at a premium to Oman. August-loading Qatar Marine crude, which is quite similar to Middle East sour benchmark Oman crude, was quickly sold out by mid-June despite its May OSP being 5 cents higher than Oman.
Traders said that demand for Qatar Marine for September was expected to stay strong this month as it has more value after considering costs and spot s. In comparison to Oman, more cargoes of Qatar Marine are available for sale in the spot markets, another trader said.
India's state-owned Oil and Natural Gas Corp (ONGC) has cancelled a tender to sell 600,000 barrels of Sudanese medium-heavy sweet Nile Blend crude for August 20-22 loading. Traders said the cargo might be taken by its subsidiary Mangalore Refinery and Petrochemicals Ltd, which runs a 194,000 barrels per day refinery.
The Brent/Dubai Exchange of Futures for Swaps (EFS) for August was valued at $3.75 a barrel, 10 cents wider than a day earlier. ICE Brent was up 1 cents at $73.06 at 0418 GMT. September DME Oman was at $68.51, after settling at $68.55 on Wednesday in Asian time. The September ICE Dubai contract was offered at $68.98, after settling at $68.40 at 0830 GMT on Wednesday.