Saudi Arabia may raise Aug crude prices to Asia to near record levels

News Image

By MG News | June 30, 2022 at 09:47 AM GMT+05:00

0:00

June 30, 2022: Top oil exporter Saudi Arabia may raise prices of light crude grades to Asia for the second straight month in August on the back of record distillate margins and strong spot premiums for Middle Eastern oil this month.

The official selling price (OSP) for Saudi's flagship Arab Light crude could rise by about $2.4 a barrel from the previous month, according to nine refining sources surveyed by Reuters on June 28-29.

The price hike would drive the August OSP close to record levels, set when May Arab Light crude reached $9.35 a barrel.

"Refining margins are very solid and we expect demand to stay robust in the near term," said one of the respondents.

Margins for gasoline, diesel, and jet fuel in Asia leaped to records in June alongside a revival of travel demand amid the easing of COVID-19 restrictions.

Spot premiums of medium-sour Oman and Dubai crude have climbed to their highest since mid-March, while light sour Murban soared to a record last week.

The monthly change in first- and third-month price spread for Middle East benchmark Dubai typically guides how much Saudi might raise or cut Arab Light's OSP.

This month, the spread widened by an average of $2.47 a barrel in backwardation - a market phase when prompt prices are higher than those in future months, indicating tight supply.

Major producers Saudi Arabia and the United Arab Emirates have flagged limited spare capacity to further boost production, while political unrest in Libya and Ecuador could further tighten oil supply.

Meanwhile, China issued 52.7 million tonnes of fresh crude oil import quotas to its independent refiners, up 49% from the same allotment last year. That will allow Chinese buyers to take more crude cargoes from the already tight global market, further driving up prices.

For other grades, respondents to Reuters' survey expect OSP for Arab Medium to raise $0.50 to $3.00 a barrel, and Arab Heavy to increase $0.50 to $2.90 a barrel.

OSP for Arab Extra Light, which typically follows Murban prices, is seen being raised as much as $5.35 a barrel. Average spot premiums of IFAD Murban against Dubai quotes increased $4.38 a barrel in June from the previous month.

Saudi crude OSPs set the trend for Iranian, Kuwaiti, and Iraqi prices, affecting about 9 million barrels per day (bpd) of crude bound for Asia.

Saudi Aramco is likely to release monthly prices after a meeting between the Organization of the Petroleum Exporting Countries and producer allies on Thursday.

Saudi Aramco officials as a matter of policy do not comment on the kingdom's monthly OSPs.

Reuters

Related News

Name Price/Vol %Chg/NChg
KSE100 131,176.40
73.64M
0.37%
489.75
ALLSHR 81,639.81
346.18M
0.41%
334.56
KSE30 40,111.55
31.92M
0.42%
166.10
KMI30 191,132.18
37.36M
0.23%
434.13
KMIALLSHR 55,131.55
169.19M
0.10%
57.39
BKTi 35,005.42
6.16M
1.26%
437.02
OGTi 28,583.18
2.85M
-0.54%
-156.17
Symbol Bid/Ask High/Low
Name Last High/Low Chg/%Chg
BITCOIN FUTURES 109,660.00 110,525.00
109,375.00
-755.00
-0.68%
BRENT CRUDE 68.51 68.89
68.37
-0.29
-0.42%
RICHARDS BAY COAL MONTHLY 97.50 0.00
0.00
-0.75
-0.76%
ROTTERDAM COAL MONTHLY 108.45 109.80
108.45
-0.55
-0.50%
USD RBD PALM OLEIN 998.50 998.50
998.50
0.00
0.00%
CRUDE OIL - WTI 66.81 67.18
66.69
-0.19
-0.28%
SUGAR #11 WORLD 16.37 16.40
15.44
0.79
5.07%

Chart of the Day


Latest News
July 04, 2025 at 12:24 PM GMT+05:00

SECP invites public feedback on share issue reforms


July 04, 2025 at 12:12 PM GMT+05:00

Pakistan produces 12m mobile phones in first half of 2025


July 04, 2025 at 11:24 AM GMT+05:00

Pakistan calls for credit rating reform at UN FFD4 summit


July 04, 2025 at 11:07 AM GMT+05:00

Saudi Riyal available at PKR 76.4 in open market


July 04, 2025 at 10:45 AM GMT+05:00

Pakistan charts AI roadmap for key development sectors



Top 5 things to watch in this week

Pakistan Stock Movers
Name Last Chg/%Chg
Name Last Chg/%Chg