Europe is consuming large amounts…
Total OPEC+ cuts could approach…
The official selling prices (OSPs) that Saudi Arabia set for its Asia-bound crude oil for November were met with mixed reactions from traders who had expected lower price hikes for the lighter grades and no price decreases for the heavier grades, according to Asian traders polled by Platts.
Earlier this week, Saudi Aramco raised the OSPs for its light crude grades to Asia by between US$0.10 and US$0.40 compared to October, with Arab Super Light priced at the highest in eight months, and Arab Extra Light – at the highest in 11 months. The Arab Light crude pricing was lifted by US$0.30 compared to October, to a premium of US$0.60 to the Oman/Dubai average. This compares with expectations for a US$0.10 price increase for Arab Light in a Bloomberg survey of six refiners and traders. The November price increase was the third consecutive month in which the Saudis have raised the OSPs for light grades to Asia.
Last month, Aramco raised the October price of its Arab Light crude oil blend for Asian clients by US$0.55 a barrel to a premium of US$0.30 to the Oman/Dubai average. The increase signaled growing demand for Saudi crude and improved refining margins in Asia due to the supply disruptions in the Gulf of Mexico that Hurricane Harvey caused.
According to traders surveyed by Platts, Middle Eastern producers are raising lighter grades prices because of the high premiums for light distillate-rich sour crude grades in the spot market in September, as product margins continue to strengthen and as opportunities for arbitrage to Asia are limited.
“They must think they have had good demand for Arab Extra Light,” a Singapore-based crude trader told Platts, while some traders commented that the Arab Extra Light price hike was “a bit higher.”
Saudi Arabia cut the OSPs for Arab Medium and Arab Heavy for November for Asian clients. One Northeast Asian crude trader commented that they hadn’t figured out “why Arab Medium and Arab Heavy dropped.” But other Asian traders noted that the lower heavier blend OSPs could be the result of lower demand for those crudes in the winter and competition from similar Middle Eastern grades, such as the Iraqi Basra crude.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.