SINGAPORE: DME Oman strengthened on Monday, the first day of Middle East crude trade this month, as Saudi Arabia is expected to raise monthly prices for all grades in July.
The world's top crude exporter could raise prices for all grades by 20 cents a barrel to more than $1, with medium and heavy grades rising the most due to improved fuel oil cracks, according to a survey of four refiners and a trader who has handled Saudi crude before.
Another key factor supporting higher prices is a widening of the Dubai cash spread between the first and third months, the trade sources said.
ADNOC is also expected to raise Murban OSP's premium to Dubai by more than 20 cents after most of the July cargoes were traded in premiums, traders said. Upper Zakum OSP's premium to Dubai could rise by 15-20 cents a barrel while that for Qatar Marine could stay flat or increase by up to 10 cents, they said.
Yet, rising supply from Angola and Iraq, and lacklustre refining margins in Asia may curb price hikes, some traders said.
Iraq has moved closer to its 3.4-million-barrel-per-day (bpd) crude export target for 2014 after it started operations at a new Single Point Mooring (SPM) terminal which can handle 800,000 bpd of oil.
"The SPM is pumping close to its full capacity because there is enough quantities available for operating all SPMs," a source from Iraq's South Oil Company said, but declined to be named as he was not authorised to speak to the media.
Oil ministry spokesman Asim Jihad had said Iraq's May export average was at 2.582 million bpd, up from 2.39 million bpd in April.
OPEC's oil output rose to a three-month high in May, a Reuters survey found on Friday, as increased supplies from Angola and a further gain in exports from southern Iraq outweighed worsening unrest in Libya.
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