Middle East crude benchmarks Oman, Dubai and Murban fell for a second day as the demand outlook turned sour while concerns over supply disruptions due to the Israel-Hamas conflict eased further.
The International Energy Agency (IEA) on Thursday lowered its forecast for growth in oil demand in 2024, suggesting harsher global economic conditions and progress on energy efficiency will weigh on consumption.
Saudi Energy Minister Prince Abdulaziz bin Salman said in a Russian TV interview that it was necessary to be “proactive” on the oil market and attempt to bring stability to it, while adding that oil producers do not target prices.
The comment from Saudi’s official came after Russian President Vladimir Putin said on Wednesday that OPEC+ coordination would continue in order to ensure predictability on the oil market and signalled strongly that a deal to constrain supply to world markets was here to stay.
In trade flows, Asian buyers are snapping up October supplies of Forties crude oil, according to LSEG and Kpler data and three trading sources, driving prices for the North Sea grade to their highest in 14 months.
As the spread between Brent- and Dubai-pegged crude widened, it has become less economical to haul oil from North Sea to Asia, trading sources said, which would cap the volumes for grades such as Forties to head to the east and support prices for Middle Eastern crude.
OSP
Kuwait kept the official selling price (OSP) for Kuwait Export Crude (KEC) to Asia in November unchanged from the prior month at $3.05 a barrel above the average of Oman/Dubai quotes, a price document reviewed by Reuters showed on Thursday.
The producer raised the November Kuwait Super Light Crude (KSLC) OSP to $2.95 a barrel above Oman/Dubai quotes, 50 cents higher than the previous month.
SINGAPORE CASH DEALS
Cash Dubai’s premium to swaps dropped 32 cents to $2.50 a barrel.
PetroChina will deliver one December-loading Oman crude to Gunvor following the trades.
NEWS
Saudi Aramco is in talks to buy a 10% stake in Shandong Yulong Petrochemical Co, it said on Wednesday, a deal that would further boost the state oil giant’s investments in China.
Global oil inventories are expected to fall by 200,000 bpd in the second half of 2023 due to voluntary output cuts from Saudi Arabia and reduced production among OPEC+ countries, the U.S. Energy Information Administration said on Wednesday.
Mohammad Ali, Pakistan’s caretaker energy minister, said on Thursday that Islamabad was considering signing a long-term deal to buy between 0.7 million and 1 million tons (up to 20,000 bpd) of Russian oil per year, the TASS news agency reported.
Source: Reuters (Reporting by Muyu Xu; Editing by Devika Syamnath)