Middle East crude benchmarks Dubai and Murban drifted lower on Thursday as top oil exporter Saudi Arabia announced a smaller-than-expected price hike.

Saudi Arabia on Wednesday raised its October official selling price (OSP) for its Arab light crude to Asia by 10 cents a barrel to $3.60 a barrel over the Oman/Dubai average, comparing to market’s previous expectation of around 45 cents.

“(The moderate price hike) may come as Saudi Arabia could increase its crude exports, as their domestic refineries plan to carry out maintenance in October,” said a refining source.

But the October Arab Light price still touched its highest level in 2023.

The market will wait for the allocation plan for the October-loading Saudi crude, which is usually revealed around the 10th of each month.

Some market participants expect Asian refiners, including the Chinese refineries who asked for lower supplies over the past months, to nominate full contractual volumes, which could lead to smaller appetites for spot purchases.

DME

The Dubai Mercantile Exchange (DME) recorded 18% growth year-on-year in physical deliveries of Omani crude oil in the first half of 2023, along with a 15% increase in trading volumes, the bourse said on Thursday in a statement.

The front-month trading volumes for DME Oman contracts OQc1 rose to 415 million barrels in the first six months of 2023 from 361 million barrels a year earlier, according to DME data.

The bourse also said a total of 106 million barrels of medium sour Omani crude were delivered via DME from March to August 2023, up from 90 million barrels for the same period in 2022.

SINGAPORE CASH DEALS

Cash Dubai’s premium to swaps dipped 8 cents to $2.07 a barrel.

NEWS

U.S. crude oil and gasoline stockpiles fell last week, while distillate inventories rose, according to market sources citing American Petroleum Institute figures on Wednesday.

The Kremlin said on Wednesday Russian President Vladimir Putin had spoken by phone with Saudi Crown Prince Mohammed bin Salman, and that recent agreements on supply cuts had ensured stability on global energy markets.

China’s crude oil imports surged in August, customs data showed on Thursday, as refiners built inventories and increased processing to benefit from higher profits from exporting fuel.
Source: Reuters (Reporting by Muyu Xu; Editing by Shilpi Majumdar)