Thursday, June 4, 2015

Saudi Arabia raises benchmark oil price to Asia

Saudi Arabia raises benchmark oil price to Asia


[LONDON] Saudi Arabia has raised its official selling price (OSP) for benchmark Arab Light to Asia next month as expected, responding to robust demand for its crude there and to higher consumption at home during the hot summer months.
Opec's top exporter, which has been pumping near record levels for the last two months, pushed up its July Asian Arab Light price by 60 cents a barrel versus June to set it at parity with the Oman/Dubai average.
State oil company Saudi Aramco said in a statement that it had cut its selling price to Northwest Europe but kept its sales price to the United States unchanged.
A Reuters survey on Tuesday forecast the Arab Light OSP to Asia would be raised by between 25 cents and 60 cents a barrel.

While a glut is building in the Atlantic basin with sellers of West African and North Sea crude struggling to find buyers, Middle East producers have seen brisk demand over the past month with strong demand from refiners across Asia.
"There are pockets of strength in Asia," said Seth Kleinman, head of energy research at Citigroup in London. "Light sweet crude in the Atlantic basin is very weak, but Middle Eastern sour grades are stronger."
Saudi Arabia and its partners in the Organization of the Petroleum Exporting Countries are expected to leave their group production target unchanged when they meet in Vienna on Friday.
The cartel has chosen to focus on building market share rather than defending world oil prices, which are down around 45 per cent from the highs seen in the middle of last year.
North Sea Brent crude was trading around US$64 a barrel on Thursday, compared with a high above US$115 a year ago.
In May, Dubai swaps, the price marker for Middle East crude sold to Asia, flipped briefly into backwardation for the first time in months, while global benchmarks Brent and West Texas Intermediate remained entrenched in contango.
Cash Dubai prices and DME Oman strengthened against Dubai swaps towards the end of last month, indicating strong demand for physical oil.
The Saudi OSP formula is loosely based on the average monthly changes in the spread between the first and third month Dubai cash prices and refining margins for oil products. Saudi Aramco also bases crude prices on customer recommendations.
Aramco dropped its Arab Light OSP to Northwest Europe by 25 cents a barrel for July from the previous month to a discount of US$2.90 a barrel to the Brent Weighted Average (BWAVE).
The Arab Light OSP to the United States was unchanged at a premium of US$1.55 a barrel to the Argus Sour Crude Index (ASCI) for July.
REUTERS

No comments:

Post a Comment

728 X 90

336 x 280

300 X 250

320 X 100

300 X600