Singapore/Beijing: Top oil exporter Saudi Arabia is expected to reduce the official selling prices (OSP) for most of the grades it sells to Asia in July due to weaker Dubai prices, a Reuters survey showed on Monday.
Saudi Arabia may drop the OSPs for Arab Extra Light and Arab Light by 15 and 45 cents per barrel respectively, while Arab Medium and Arab Heavy could see cuts of 60 and 50 cents, according to the median of estimates from eight refiners, traders and an analyst.
Ample supply of sour crude has depressed the front-month Dubai price, narrowing the prompt inter-month spread in backwardation. In a backwardated market, prompt prices are higher than future months.
Improved gasoil cracks could limit the downside for light grades, Arab Extra Light and Arab Light, while heavier grades such as Arab Medium and Arab Heavy could fall more on weaker fuel oil cracks.