Classifieds | Archives | Jobs | About TGT | Contact | Subscribe
 | 
Last updated 1 minute ago
Printer Friendly Version | TGT@Twitter | RSS Feed |
HOME LOCAL MIDEAST ASIA WORLD BUSINESS SPORT OPINION WRITERS
Saudi Arabia likely to cut March OSPs
February 02, 2013
 Print    Send to Friend

SINGAPORE: Top oil exporter Saudi Arabia may lower its official selling prices for all crude grades for its Asian buyers in March on expectations of weaker demand due to refinery maintenance and warmer weather, a Reuters survey showed on Friday.

Saudi Arabia may lower the OSPs for Arab Light and Arab Medium by a dollar per barrel, while Arab Heavy and Arab Extra Light may be cut by 65 cents and 90 cents each, according to the median of estimates from six traders and refiners.

Saudi crude OSPs are usually released around the fifth of each month, and set the trend for Iranian, Kuwaiti and Iraqi prices, affecting some 7 million barrels per day (bpd) of crude bound for Asia.

 Spot differentials for March cargoes, which traded last month, weakened considerably over January as refiners from north Asia cut their purchases.

A weak Dubai market added further pressure.

North Asian refiners, who had previously driven prices higher as they stepped up winter buying, slowed their purchases ahead of a heavy refinery maintenance period that kicks off in the second quarter.

“The weak Dubai time-spreads and refinery turnarounds will be the main factors affecting OSPs,” said a trader with a western oil major.

 The front-month Dubai spread  narrowed sharply to 10 cents a barrel in backwardation Jan.31 and dropped to as little as 3 cents per barrel this week. That compares with 40 cents on Dec.31 and 80 cents in late November.

 Immediate prices are higher than those in future months in a backwardated market, suggesting stronger demand for near-term cargoes. But the narrowing to near-zero levels suggests that the strong prompt demand seen in earlier months may be dying out.

 Not only is buying by refiners in Japan and South Korea expected to wane as units head into planned maintenance, seasonally warmer weather in April will also likely cut demand for heating fuels.

Complex refinery margins steadily increased during January, to $8.50 per barrel from $5.50 at the start of the month, while product cracks —the profit or loss made by a refinery by processing crude into specific products —remained steady, suggesting demand for lighter grades may be stable.

Saudi Aramco, the world’s biggest crude exporter, sets its crude prices based on recommendations from customers, and after calculating the change in value of its oil over the past month, considering yields and product prices.

Reuters

Add this page to your favorite Social Bookmarking websites
Comments
 
Post a comment
 
Name:
Country:
City:
Email:
Comment:
 
    
    
 
FRONTPAGE
 
GALLERY
 
PANORAMA
 
TIME OUT
 
SPORT
 
 
Advertise | Copyright