2 April 2024 - 15:18
  • News ID: 639417
Saudi Arabia may hike May crude oil prices to Asia

Top oil exporter Saudi Arabia may raise the official selling price (OSP) for flagship Arab Light crude in May after Middle East benchmarks strengthened last month, industry sources said.

The May OSP for Arab Light crude could rise by 20 to 30 cents a barrel from April, according to a Reuters survey of five refining sources.

The expectation of higher prices comes after the backwardation structure in the Dubai benchmark widened by 33 cents a barrel in March versus February, Reuters data showed.

When the market is in backwardation, prompt prices are higher than those in future months, implying tight supply.

The May OSP for Arab Extra Light may increase by 30-50 cents a barrel on the back of higher premiums for similar-quality Murban crude from Abu Dhabi, one of the respondents said.

The average premium for May ICE Murban futures to Dubai swaps rose 58 cents to $1.73 a barrel last month, Reuters data showed, buoyed by robust demand in Asia.

Tighter supply for medium and heavy grades due to oilfield maintenance in Saudi Arabia, OPEC+ production cuts and rising domestic consumption in several Middle East producing countries is expected to support May OSPs for Saudi Arabia's Arab Medium and Arab Heavy, the sources said.

Asian refiners' losses on high-sulphur fuel oil have also narrowed, underpinning prices for Saudi crude which yields a large portion of the residue.

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.

News ID 639417


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