INSUBCONTINENT EXCLUSIVE:
Top oil exporter Saudi Arabia may raise prices for most crude grades it sells to Asia in November on expectations for demand recovery and
Chinese refineries to increase output following the issuance of new product export quotas.The November official selling prices (OSP) for
flagship Arab Light crude may rise by 25 cents a barrel, according to the median of the responses of five refining sources surveyed by
29-30.Oil demand is expected to improve, which we can see from current market structure,& said one respondent.The backwardation in the Dubai
market structure widened during trading last month, implying that demand for crude in the near-term is rising
The premium for front-month Dubai over the price for the third-month averaged $5.36 a barrel in September, up from $5.07 in August.The
market also expects China, the world&s biggest crude importer, to increase purchases as Beijing has issued a fresh round of refined product
export quotas, totalling 15 million tonnes
That could encourage Chinese refineries to lift their crude buying to ramp up fuel output.Refining margins for gasoline and diesel plunged
on China&s new export quotas as a flood of refined products would knock down the prices of the products.That&s a reason why we forecast the
official prices for lighter crude grades to only see a small hike,& said another respondent.The respondents polled by Reuters assess the
price increase for Arab Medium and Arab Heavy to be larger than Arab Light, as the refining margins, also known as cracks, for fuel oil are
performing better than the light- and middle-distillate products , .China issued 1.75 million tonnes of export quotas for low-sulphur fuel
oil, compared to 13.25 million tonnes for other products in the recent round.OPEC+ will consider an oil output cut of more than a million
barrels per day (bpd) during their monthly meeting this week, in what would be the biggest move yet since the COVID-19 pandemic to address
oil market weakness.Benchmark oil prices have fallen by more than 30% since March.Saudi crude OSPs are around the fifth of each month, and
set the trend for Iranian, Kuwaiti and Iraqi prices, affecting more than 9 million barrels per day (bpd) of crude bound for Asia.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.The post
Saudi Arabia may raise Nov official crude prices for Asia first appeared on Ariana News.
