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Top oil exporter Saudi Arabia is expected to reduce prices for most of the crude grades it sells to Asia in March to track a weaker Middle East benchmark Dubai and lower refinery margins for light and middle distillates. trade sources said on Monday.
The March official selling price (OSP) for flagship Arab Light crude could fall by 45 to 65 cents a barrel. a Reuters survey with four refiners showed.
“Gasoline and naphtha cracks are weak.“ one of the respondents said.
This could point to a bigger price cut estimated at $1.40 a barrel for Arab Extra Light’s OSP in March. the respondent said.
Middle East crude benchmark Dubai slumped in the last week of January trade as most refiners have completed their purchases. while the coronavirus outbreak in China reduced demand at the world’s largest oil importer.
Asia’s biggest refiner Sinopec has said it will cut throughput at its plants by 600.000 barrels per day (bpd) in February. although it is unclear how long the production cuts will last. Refiners’ profits for jet fuel. in particular. have slumped on flight cancellations.
Still. a strong rebound in high-sulfur fuel oil (HSFO) margins could underpin prices for heavier grades. the survey showed.
The March OSP for Arab Medium is expected to be little changed from the previous month. and the prices for Arab Heavy could rise. most of the respondents said. Saudi crude OSPs are usually released around the fifth of each month. and set the trend for Iranian. Kuwaiti and Iraqi prices. affecting more than 12 million barrels per day (bpd) of crude oil bound for Asia.
State oil giant Saudi Aramco sets its crude prices based on recommendations from customers and after calculating the change in the value of its oil over the past month. based on yields and product prices.
Saudi Aramco officials as a matter of policy do not comment on the kingdom’s monthly OSPs.
