SINGAPORE: DME Oman's discount to Dubai widened in the Middle East crude market on Wednesday amid expectations Asian refiners will take more term supply and reduce spot purchases after Saudi Arabia cut prices for all grades by at least $1 a barrel.
Saudi Aramco has cut its October price for its Arab Light grade for Asian customers by $1.70 a barrel versus September to a discount of $0.05 a barrel to the Oman/Dubai average, it said.
The official selling prices (OSPs) for Arab Super Light and Extra Light were reduced by $1.50 and $2 a barrel, respectively. The cuts for heavier grades, Arab Medium and Arab Heavy, were less severe at $1.50 and $1.20 a barrel, respectively, due to support from stronger fuel oil cracks.
Some refiners said the price reductions were in line with expectations, after spot differentials slumped for October in last month's trade while the Oman benchmark strengthened against Dubai.
"Saudi has already signalled everything has to be cut by more than $1," a trader said, adding that producers which do not have similar price cuts would be less competitive.
Unsold cargoes have piled up in the past couple of months as traders were reluctant to sell after differentials hit multi-year lows.
DME OMAN
DME Oman for November settled at $100.44, up 96 cents, at 0830 GMT. This puts DME Oman at 60 cents a barrel below Dubai swaps against a 52-cent discount in the previous session.
MARKET NEWS
Iranian Oil Minister Bijan Zanganeh said Tehran would continue to bypass sanctions after the United States penalised a number of companies for violating sanctions imposed on Iran, mostly in connection with its nuclear programme.
Iraqi Kurdistan has shipped 10 million barrels of oil from the Turkish port of Ceyhan since May, Turkish Energy Minister Taner Yildiz said, as the autonomous region employs new tactics to establish independent oil sales in defiance of Baghdad.
Production at the UK's North Sea Buzzard oilfield will ramp up over the next week after the demobilisation of a drilling rig, the operator said in a statement on Thursday, marking the return of one of the key fields that underpins Brent crude oil futures.
A group of rebels campaigning for autonomy in eastern Libya rejects the parliament set up by another armed group in Tripoli but will honour a deal to keep major oil ports open, a rebel spokesman said.
Libya's oil output has risen to 725,000 barrels a day, more than six times the level two months ago, after the rebels agreed with the central government to end a blockade of four oil ports in the east.
Pioneer Natural Resources Co said on Wednesday it has benefited from improved pricing as a result of its ability to sell an ultra-light oil called condensate outside of the United States.
Comments
Comments are closed for this article.