Saudi Aramco has raised most official selling prices for its crude loading in July and bound for Asia, the Mediterranean and Northwest Europe, with biggest increases for the lightest grades, but it left prices for the US unchanged, the company said June 3.
For Asia-bound crude, July differentials against Dubai/Oman for Saudi Light and Medium were respectively raised by 20 cents/b and 10 cents/b versus June, while the Heavy OSP was cut 10 cents/b.
The cash Dubai premium over same-month Dubai futures spread, understood to be a key element in OSP calculations, rose 10 cents/b to an average of $1.14/b in May, up from an average of $1.04/b in April, S&P Global Platts data showed.
July OSPs for Northwest Europe saw the biggest rise, with prices lifted $1.00/b for Light crude and 60 cents/b for Heavy.
For crude destined for Mediterranean, OSPs were raised 90 cents/b for Light crude and 40 cents/b for Heavy.
For US-bound crude, differentials for all crude grades were unchanged from June.
Market participants and analysts had expected OSPs to be raised, particularly for lighter grades, given signs of a strengthening sour crude complex in Asia and Europe in recent weeks.
“We anticipate the company to raise the OSPs to Asia on the higher end of market expectations due to recovering summer driving demand and less-than-sufficient supply growth,” S&P Global Platts Analytics said in a recent note.
“Continuous improvement of light product cracks along with relatively low stocks in Singapore will underpin a higher increase of light grade OSPs than heavier ones. On the flip side, the ripple effect of China’s taxation on imported blended bitumen as well as accelerated replacement of fuel oil with more imported LNG in South Asia will potentially lead to rollover or even cuts to the heavier grades.”
Historically the first to issue its prices, Aramco has moved to second place of late with ADNOC now setting prices based on its new Murban futures contract. It set its July Murban price at $66.70/b on June 2.