Quotes: US MENA   Enter Symbol: NewsLetter: Search: advanced

KSA may drop crude prices for Asian buyers  Join our daily free Newsletter

MENAFN - Arab News - 02/02/2013

No. of Ratings : 0
Add to Mixx!


(MENAFN - Arab News) The Kingdom 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.

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, Reuters reported.

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," a trader with a western oil major told Reuters.

The front-month Dubai spread narrowed sharply to 10 cents a barrel in backwardation on Jan 31 and dropped to as little as 3 cents per barrel last 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 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 reported.


  MENA News Headlines




Middle East North Africa - Financial Network

MENAFN News Market Data Countries Tools Section  

Middle East North Africa - Financial Network

Main News
News By Industry
News By Country
Marketwatch News
UPI News
Comtex News

IPO News
Islamic Finance News
Private Equity News

How-To Guides
Technology Section

Travel Section

Search News

Market Indices
Quotes & Charts

Global Indices
Arab Indices

US Markets Details


Oil & Energy

Currencies Cross Rates
Currencies Updates
Currency Converter

USA Stocks
Arab Stocks

Saudi Arabia 

Investment Game
Economic Calendar
Financial Glossary

Portfolio Tracker


Financial Calculators

RSS Feeds [XML]

Corporate Monitor


Real Estate
Submit Your Property

Arab Research
Buy a Research

Press Releases
Submit your PR

Join Newsletters

© 2000 menafn.com All Rights Reserved.  Terms of Service | Privacy Policy | Contact Us | Advertise | About MENAFN | Career Opportunities | Feedback | Help