• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 6 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 2 days Does Toyota Know Something That We Don’t?
  • 5 days OPINION: Putin’s Genocidal Myth A scholarly treatise on the thousands of years of Ukrainian history. RCW
  • 2 days World could get rid of Putin and Russia but nobody is bold enough
  • 18 hours America should go after China but it should be done in a wise way.
  • 5 days CHINA Economy IMPLODING - Fastest Price Fall in 14 Years & Stock Market Crashes to 5 Year Low
  • 4 days China is using Chinese Names of Cities on their Border with Russia.
  • 5 days Russian Officials Voice Concerns About Chinese-Funded Rail Line
  • 4 days CHINA Economy Disaster - Employee Shortages, Retirement Age, Birth Rate & Ageing Population
  • 5 days Putin and Xi Bet on the Global South
  • 5 days "(Another) Putin Critic 'Falls' Out Of Window, Dies"
  • 6 days United States LNG Exports Reach Third Place
  • 6 days Biden's $2 trillion Plan for Insfrastructure and Jobs
  • 9 days huge-deposit-of-natural-hydrogen-gas-detected-deep-in-albanian-mine
Charles Kennedy

Charles Kennedy

Charles is a writer for Oilprice.com

More Info

Premium Content

Oil Buyers Brace For Saudi Arabia To Boost Prices Once Again

  • Asian buyers of Saudi crude oil expect September prices from Arab Light to rise by $0.45 per barrel to reach a $3.65 premium over the Dubai/Oman benchmarks.
  • Saudi Arabia’s voluntary production cut combined with production problems in Angola, Nigeria, and Libya is tightening markets.
  • Some analysts believe Saudi Arabia will start to unwind its 1 million bpd production cuts in September as refiners race to secure barrels.

Saudi Arabia may raise the price of its crude for the third month in a row for September cargos, according to sources from the refining industry surveyed by Reuters.

Per those sources, Asian buyers of Saudi crude could see September prices for Arab Light rise by $0.45 per barrel from August’s level, reaching a $3.65 premium over the Dubai/Oman benchmarks—the highest since the start of the year.

"It's always hard to make prediction on Saudi's OSPs. But the rollover of the 1 million bpd cut is seen as a baseline in September price assessments," one of the Reuters sources said.

The voluntary production cuts that Saudi Arabia began in July are already squeezing supply of oil from OPEC. Combined with production problems in Angola, Nigeria, and Libya, the cuts contributed to an 840,000-bpd decline in OPEC’s total for July, according to another Reuters survey.

As for going forward, opinions among analysts diverge. Some, like the unnamed source from the refining industry, believe Saudi Arabia will roll the cuts over from August. Others, such as a group surveyed by Bloomberg last month, believe the Saudis may start rolling these back.

“There’s ample evidence for Saudi Arabia to start unwinding the cuts in September. The market is screaming out for these barrels, and refiners are scrambling to get hold of them,” James Davis, director of short-term global oil services at FGE, told Bloomberg.

The respondents in the survey forecast Riyadh could reduce the cuts by between 250,000 and 500,000 barrels daily in September.

Arab Light, the flagship Saudi oil blend, has been trading in a backwardation recently, Reuters noted in its report, suggesting that demand was exceeding available supply, thanks to the voluntary cuts.

The supply of heavier grades has also been constrained leading analysts to expect price hikes in those, too. The only Saudi crude that may see no change in prices is Arab Extra Light due to ample supply.

By Charles Kennedy for Oilprice.com

ADVERTISEMENT

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News