SINGAPORE: Middle East crude benchmarks weakened on Tuesday ahead of monthly price announcements from producers.
UAE: ADNOC is expected to cut the OSP premiums to Dubai quotes for Murban and Das by about 40 cents a barrel while Upper Zakum's OSP premium to Dubai could fall by 15 cents.
SAUDI OSP PREVIEW: Saudi Arabia is expected to cut prices for all grades of crude it sells to Asia in January amid a weaker Middle East benchmark Dubai and low margins for light products, industry sources said.
The official selling price (OSP) for Arab Light may fall between 50 cents and $1.20 a barrel to the lowest in at least three months, a Reuters survey of six refiners showed.
"The OSP should be lowered to compensate for a weaker intermonth structure, but since the flat price has fallen below $60 I wonder if Aramco will cut prices less," said a second respondent, expecting a 50 cent cut in Arab Light's January OSP.
Still, fuel oil margins have hit all-time highs, supporting prices for all Middle East grades which yield a large portion of the residue. Hence, Arab Medium and Arab Heavy OSPs will see smaller price cuts, the respondents said, with one forecasting that Arab Heavy will remain unchanged in January.
"The fuel oil crack is quite strong while naphtha and gasoline cracks are really weak so we expect a heavy discount on Arab Extra Light. There might even be a price hike for Arab Medium and Arab Heavy," said a third respondent.
ARBITRAGE: China imported its first US crude oil cargo in around two months last week, according to industry sources and Refinitiv Eikon data - a deal made by an independent "teapot" refiner as larger players held off amid trade tensions.
Independent refiner Shandong Yuhuang Petrochemicals received its first-ever US crude shipment last week, a company executive said.
"We decided to buy this US cargo as it has good value for money," said the executive, who declined to be named due to company policy.
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