SINGAPORE: The Middle East crude market held steady on Tuesday as traders eyed new monthly official selling prices (OSPs) to gauge the sentiment for the front-month September trading.
Top oil exporter Saudi Arabia is expected to cut August prices of most grades against July on a weaker Dubai market structure and poor margins for most oil products, traders said.
The extent of the price cuts would depend on whether state oil giant Saudi Aramco has tweaked a formula used to calculate monthly prices, they said.
The OSP for flagship Arab Light is expected to fall by 15-75 cents a barrel in August from the previous month, a survey of four refiners and traders showed.
Arab Light could see a smaller price cut if Saudi Aramco is using the new formula.
The average price difference between the first and third months in the last five trading days in June versus May is typically used by industry players to calculate August OSPs, but the producer may have changed it to using a monthly average, traders said. Saudi Aramco does not comment on its OSPs.
"They never announce (their price formula) so we need more time to observe," a trader with a North Asian refiner said.
Also weighing on prices are weaker margins for refiners in June. Three of the four respondents expect bigger price cuts for medium and heavy grades than those for lighter ones as the former contains more fuel oil.
For ADNOC grades, Murban OSP's premium to Dubai could rise by 20-30 cents a barrel on firm demand for the light sour grade, a trader said. He expects Upper Zakum OSP's premium to Dubai to stay flat or fall by 10 cents.
Dubai crude, as quoted by price-reporting agency Platts, averaged $108.03 a barrel for June, traders said.
Comments
Comments are closed for this article.