Middle East crude benchmarks Oman, Dubai and Murban surged on Monday as the market expects a tighter crude supply after the OPEC+ planned to take extra output reduction.

Saudi Arabia and other OPEC+ oil producers on Sunday announced additional oil output cuts of around 1.16 million barrels per day, in a surprise move that analysts said would cause an immediate rise in prices and the United States called inadvisable.

Middle East crude oil supplies, especially medium and heavy sour grades, are set to tighten further from May, raising costs for refiners from Asia to Europe and pushing them to seek more supply from Russia, Africa and the Americas.

SAUDI OSP PREVIEW

Top oil exporter Saudi Arabia may raise crude prices for Asia in May after OPEC+ announced additional production cuts to shore up the market just as China’s demand is expected to increase in the second quarter as refineries finish maintenance.

The May official selling price (OSP) for flagship Arab Light crude could be hiked by about 20 cents to $2.7 a barrel, a third month of increases, a Reuters survey of sources from five Asian refiners showed on Monday.

SINGAPORE CASH DEALS

Cash Dubai’s premium to swaps rose 46 cents to $2 a barrel.
Source: Reuters