• 3 minutes Will Iron-Air batteries REALLY change things?
  • 7 minutes Natural gas mobility for heavy duty trucks
  • 11 minutes NordStream2
  • 1 hour GREEN NEW DEAL = BLIZZARD OF LIES
  • 5 hours U.S. Presidential Elections Status - Electoral Votes
  • 1 day Evergrande is going Belly Up.
  • 1 day Is China Rising or Falling? Has it Enraged the World and Lost its Way? How is their Economy Doing?
  • 20 hours Monday 9/13 - "High Natural Gas Prices Today Will Send U.S. Production Soaring Next Year" by Irina Slav
  • 4 days Poland Expands LNG Powered Trucking and Fueling Stations
  • 5 hours Europeans and Americans are beginning to see the results of depending on renewables.
  • 5 days World’s Biggest Battery In California Overheats, Shuts Down
  • 4 days The unexpected loss of output from wind turbines compels UK to turn to an alternative; It's not what you think!
  • 1 day Forecasts for Natural Gas
  • 3 days Ten Years of Plunging Solar Prices
  • 3 days Extraction of gasoline from crude oil.

Saudis May Cut Oil Prices For Asian Markets

Saudi Arabia may reduce its official selling price for oil for Asian buyers in August, unnamed sources told Reuters, adding the move was prompted by a decline in Middle Eastern benchmarks last month.

A Reuters survey among five refiners revealed the official selling price for the Kingdom’s flagship Arab Light hit a five-year high for deliveries this month, but as benchmarks weaken OSPs have to come down, too. The cut could be of between US$0.30-0.50 per barrel.

“The (official selling) prices need to come down because (spot) prices could drop further next month,” one refiner told Reuters, adding the Dubai benchmark used in pricing cargoes for September loading had fallen since that five-year peak last month.

Saudi Arabia earlier this year increased its OSPs for Asian clients after the U.S. ended the sanction waivers granted to eight Iranian oil importers. Out of options, many refiners in the region were forced to place additional orders for Saudi crude to fill the gap.

However, it was quickly clear this can’t be a long-term strategy as Asian buyers, and particularly China and India, would soon begin to look for cheaper alternatives if Saudi prices remain high. What’s more, benchmarks have proved stubborn in their reluctance to continue climbing up: after a brief spike by about US$2 per barrel on the largely expected news OPEC+ will extend its production cuts, Brent and WTI both retreated.

In addition to the already chronic effect of U.S. production updates on prices, worry about global oil demand is returning, too, and it wiped out a lot of the gains oil had registered yesterday.

“After 2-1/2 years of production cuts, the effects of rolling over production cuts is losing steam,” an analyst from OANDA told Reuters. “The trade war is not likely to get resolved any time soon,” Edward Moya said, “and while central banks globally are expected to deliver fresh stimulus in the coming months, economic activity is continuing to trend lower.”

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | 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