SINGAPORE: The Middle East crude market held steady on Monday ahead of the release of monthly prices from Gulf producers later this week, which will provide price direction for November-loading cargoes trading this month.
Top oil exporter Saudi Arabia is expected to cut October prices for all grades sold to Asia, reflecting weak demand and a stronger Oman price marker.
Flagship Arab Light may also see the biggest cut in its official selling price (OSP) since February, a Reuters survey of four refiners showed.
Three of four respondents expect Arab Light's October OSP to be reduced by at least $1 a barrel, the biggest since a $1.30 cut in February.
Price cuts were also expected for ADNOC and Qatari grades after October-loading cargoes were traded at discounts between 70 cents and $1 to their respective OSPs.
While margins for oil products in Asia have improved recently, refiners would need to assess their profits over a longer period in order to be confident enough to increase output, said a trader.
"Demand is weak and it needs time to recover," he said.
Dubai crude, as quoted by price-reporting agency Platts, averaged $101.73 a barrel for August, traders said.
The monthly average price is the lowest since June 2013, Reuters data showed.
DME OMAN
DME Oman for November settled at $101.69, up 6 cents, at 0830 GMT. This puts DME Oman at 4 cents a barrel below Dubai swaps.
REFINERY
Japanese refiner Cosmo Oil Co will shut the 100,000 barrel-per-day Chiba No.1 crude distillation unit (CDU) and 63,000 bpd Yokkaichi No.5 CDU from October for planned maintenance, an industry source familiar with the matter said.
Malaysia's Petronas is running the 100,000 barrels-per-day (bpd) Malacca refinery it jointly owns with US oil company Phillips 66 at a lower rate than usual after unexpectedly shutting a secondary unit.
Indonesia's state energy firm Pertamina plans to shut a crude distillation unit (CDU) and a secondary unit at its Cilacap and Balikpapan refineries later this month for maintenance, industry sources said.
Rosneft, Russia's largest oil producer, said on Monday it restarted primary oil processing at its Siberian Achinsk refinery following a fatal fire in June.
MARKET NEWS
India's Reliance Industries Ltd plans to invest about $13 billion in energy projects, including a 400,000 barrels per day (bpd) crude refinery at its Jamnagar complex, documents seen by Reuters show.
Korea Gas Corp (KOGAS) has started commercial crude production in Iraq's Badra oilfield as planned, the state-run South Korean company said in a statement.
Iran said on Saturday that new US sanctions placed on some Iranian and foreign banks and businesses would have negative consequences on its nuclear negotiations with world powers.
Mexican state oil giant Pemex forecast on Friday that its crude oil output would average 2.4 million barrels per day (bpd) in 2015, which could mark the first year that crude production at the company has risen in over a decade.
More Japanese refiners are likely to buy US condensate if the light oil is ruled to be not liable for customs duty, as is expected, industry and government sources said.
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