SINGAPORE: Top oil exporter Saudi Arabia is expected to cut its crude oil official selling prices (OSPs) for Asian buyers for a second straight month, tracking a drop in Middle East benchmarks and weak refining margins, industry sources said on Monday.
Seven sources from Asian refineries on average expected the October OSP for flagship Arab Light crude to fall by $1 a barrel, which would make it the biggest monthly drop since May, although forecasts ranged from cuts of 50 cents to $1.80 a barrel, a Reuters survey found.
Middle East benchmarks cash Dubai and DME Oman differentials fell by around $1.40 this month, trading at discounts to Dubai swaps, data compiled by Reuters showed.
Despite spot purchases by Indian, Korean and Japanese refiners, Middle East sour crude grades from Abu Dhabi and Qatar traded at spot discounts in Asia's physical market this month.
Weak fuel demand because of renewed lockdown restrictions in response to the continued COVID-19 pandemic have kept market sentiment bearish, but Aramco is expected to reduce its crude OSPs gradually, rather than deliver steep cuts in one-go, one of the sources said. Another two of the sources, all of whom asked not to be named, expected steeper price reductions for lighter grades Arab Extra Light and Arab Light, as Asia's refining margins for naphtha and middle distillates dropped in August. Cracks for gasoline slightly improved.
Comments
Comments are closed for this article.