Top oil exporter Saudi Arabia may cut prices on most grades of crude it sells to Asia in December due to weakness in the Middle East benchmark Dubai , according to business sources.
A drop in Saudi oil prices would be a sign of weak demand and provide more evidence to the Saudi-led Organization of the Petroleum Exporting Countries and its allies, including Russia, a group known as the name OPEC+, to possibly delay plans to increase production from December.
The official selling price (OSP) of light Arab oil could fall 30 to 50 cents a barrel in December from the previous month, according to a Reuters survey of six refining sources, matching a similar decline in spreads. prices in Dubai last month.
Spot premiums for Middle East crude fell last month as the Asian market was well supplied while demand from major buyers such as China remained lackluster despite a rebound in refining margins.
Still, some of those surveyed expect smaller price cuts for the heaviest Saudi crude grades, such as Arab Medium and Arab Heavy, in December, thanks to large margins for high-sulfur fuel oil.
Complex refining margins in Singapore, the region's bellwether, rebounded to more than $4 a barrel in the second half of October, from an average of $2.12 in September, the lowest in the 'year. [REF/MARGIN1]
OPEC+ could delay a planned increase in oil production in December by a month or more, four sources familiar with the matter told Reuters on Wednesday, citing concerns over weak oil demand and increase in supply.
The decision to delay the increase could come as early as next week, two of the sources said.Saudi crude OSPs are usually released around the 5th of each month, and set the trend for Iranian, Kuwaiti and Iraqi prices, affecting around 9 million barrels per day (bpd) of crude to Asia.
Saudi Aramco, the state oil giant, sets its crude prices based on customer recommendations and after calculating the change in the value of its oil over the past month, based on product yields and prices .
As a matter of policy, Saudi Aramco officials do not comment on the kingdom's monthly sales prices.
Below are the Saudi prices forecast for December (in $/bbl relative to the Oman/Dubai average):
NOV Change est.DEC OSP
Arab Extra Light +2,00 -0,50/-0,27 +1,50/+1,73
Arab Light +2,20 -0,50/-0,30 +1,70/+1,90
Average Arab +1.35 -0.40/+0.00 +0.95/+1.35
Heavy Arabian +0.20 -0.40/+0.00 -0.20/+0.20
Source : Reuters : Reuters, commerce
