Middle East crude benchmarks Oman, Dubai and Murban drifted higher on Wednesday as the market expected top oil exporter Saudi Arabia to maintain or even hike its August official selling prices (OSPs).
State oil giant Saudi Aramco typically releases OSPs around the fifth of each month, and sets the trend for Iranian, Kuwaiti and Iraqi prices, affecting about 9 million bpd of crude bound for Asia.
Some market participants expect the Saudi OSPs to be released after the OPEC+ concludes a meeting of oil industry CEOs with energy ministers from the OPEC+ oil producers group on July 6.
Saudi Arabia this week announced it would extend a voluntary production cut of 1 million barrels per day for July to include August, tightening supply and lending supports to oil prices.
Meanwhile, the energy minister of United Arab Emirates said on Wednesday that additional oil output and export cuts earlier this week by Saudi Arabia and Russia should be enough to help balance the oil markets, adding that the UAE would not be contributing to fresh cuts.
RUSSIAN CRUDE
Prices of Russia’s ESPO Blend crude oil shipped to China have surged to a seven-month high as buyers rush to secure cargoes amid higher Russian demand and after Moscow pledged to cut exports.
Russian light sweet crude loaded at the Pacific port of Kozmino for August-delivery to China traded at a discount of $4 per barrel against ICE Brent futures on a delivered-ex-ship (DES) basis, a significant jump from the $6 discount for July cargoes, traders said.
OSP
Indonesia has set the official Indonesia Crude Price (ICP) for Minas crude oil at $74.70 a barrel for June, down $0.85 from the previous month, a document from the Ministry of Energy & Mineral Resources showed.
The June Minas alpha, or price difference to dated Brent, was set at minus $1.43 a barrel, up $0.81 from a month earlier, the document which was seen by Reuters showed.
SINGAPORE CASH DEALS
Cash Dubai’s premium to swaps rose 11 cents to $1.13 a barrel.
NEWS
Morgan Stanley on Wednesday lowered its oil price forecasts, predicting a market surplus in the first half of 2024 with non-OPEC supply growing faster than demand next year.
The Caspian Pipeline Consortium has stopped three pumping stations in western Kazakhstan because of a power outage in the region, the CPC said on Wednesday.
The Russian budget’s oil and gas revenues declined by 26.4% in June year on year to 528.6 billion roubles ($5.88 billion), finance ministry data published on Wednesday showed.
Source: Reuters (Reporting by Muyu Xu; editing by Jason Neely)