Middle Eastern benchmarks rose on Wednesday after Saudi Arabia trimmed its January official selling prices (OSPs) at smaller scales than market expectation, which may encourage other producers to follow the tune to set higher prices.
Top oil exporter Saudi Arabia cut the official selling price (OSP) for January-loading Arab Light to Asia by 50 cents a barrel from December to $3.50 a barrel over Oman/Dubai quotes, the first reduction in seven months, reacting to weakening premiums in the physical market amidst supply overhang concerns.
But the price reduction is smaller than the market expectation of a trim of about $1, showed a Reuters survey.
Some market participants said the high prices could prompt refiners to lift less cargo and turn to buying from other suppliers in the spot market.
Saudi’s OSPs typically set the trend for Iranian, Kuwaiti and Iraqi prices, affecting about 9 million barrels per day of crude bound for Asia.
OSP
Qatar set January-loading Marine crude OSP at $0.90 a barrel over Oman/Dubai quotes, down from $2.00 in the prior month. It also slashed land crude OSP to $0.10 a barrel over Oman/Dubai quotes from $2.35.
ASIAN REFINERIES
Sinopec’s 600028.SS Qingdao Petrochemical plant has resumed operation after shutting down for two months of maintenance, the refinery said in a statement on social media.
The refinery, located in the eastern Chinese province of Shandong, has 100,000 barrels per day (bpd) of crude oil processing capacity.
SINGAPORE CASH DEALS
Cash Dubai’s premium to swaps rose 11 cents to $0.66 per barrel.
NEWS
Russian President Vladimir Putin is visiting the United Arab Emirates and Saudi Arabia on Wednesday and will hold talks with Saudi Arabian Crown Prince Mohammed bin Salman, a rare trip abroad to discuss oil, OPEC+ and the conflicts in Gaza and Ukraine.
The Dubai Mercantile Exchange (DME) recorded in November the highest physical deliveries of Omani crude oil since September 2018, the bourse said on Wednesday in a statement, with more than 24 million barrels to be delivered in January 2024.
U.S. crude oil and fuel inventories rose last week, according to market sources citing American Petroleum Institute figures on Tuesday.
The OPEC+ group of oil-producing countries stands ready to strengthen oil production cuts in the first quarter of 2024 to eliminate “speculation and volatility”, Russian Deputy Prime Minister Alexander Novak was reported as saying on Tuesday.
Source: Reuters (Reporting by Muyu Xu; Editing by Sohini Goswami)