Middle Eastern benchmarks Dubai and Murban slumped on Friday as the output cuts announced by the major oil producers disappointed the market who expected only marginal deficit or even surplus of oil supply in early 2024.
Spot premiums for Dubai and Murban were $1.12 and $0.89 a barrel over the Dubai quotes, respectively, down from $1.90 and $1.21 in the prior session.
OPEC+ oil producers on Thursday agreed to voluntary output cuts totalling about 2.2 million barrels per day (bpd) for the first three months of 2024 led by Saudi Arabia rolling over its current voluntary cut.
But market participants and analysts sounded skepticism about the implementation of the voluntary cuts and if the move can slow down the build up of global oil inventory.
Top oil exporter Saudi Arabia may trim the price for its flagship Arab Light crude to Asia for the first time in seven months, despite an extension of its voluntary supply cut, as the market deals with ample supply and tepid demand.
State oil giant Saudi Aramco 2222.SE may cut the January official selling price (OSP) for Arab Light by about $1 to around $3 a barrel over the Oman/Dubai average, according to six respondents surveyed by Reuters.
Meanwhile, ADNOC has notified several North Asian refineries that the firm will supply full contractual volumes in February.
OSP
The official selling price of November-loading Malaysian crude oil (MCO) grades OSP/MY has been set at $94.38 a barrel, according to a price document issued by state oil company Petronas, down by $7.72 a barrel from the previous month.
ASIAN REFINERIES
Japan’s biggest refiner, Eneos Corp, restarted a 150,000 barrels-per-day (bpd) crude distillation unit (CDU) at its Mizushima-A refinery in western Japan on Nov. 27 after scheduled maintenance, a company spokesperson said on Friday.
SINGAPORE CASH DEALS
Cash Dubai’s premium to swaps fell 78 cents to $1.12 per barrel.
NEWS
Brazil hopes to join the OPEC+ group of oil-producing countries in January after a full technical analysis, the country’s energy minister said on Thursday, however sources said Brazil is not expected to take part in the group’s coordinated output caps.
U.S. crude production in September rose to a new monthly record of 13.24 million barrels per day, helped by a large increase in North Dakota, home to the Bakken shale, Energy Information Administration data showed on Thursday.
The Caspian Pipeline Consortium (CPC), a main export route for Kazakhstan’s crude oil, said on Thursday it has resumed oil loadings at its Black Sea terminal which had been suspended due to storms, disrupting exports since last Friday.
J.P. Morgan said on Thursday that steady demand growth will lift the prices of key commodities in 2024 from current levels but advised that investments should be tactically timed.
Source: Reuters (Reporting by Muyu Xu; Editing by Krishna Chandra Eluri)