Quantum Commodity Intelligence – Saudi Aramco has increased most premiums on Official Selling Prices (OSPs) for August-loading crude to Asia after extending output cuts for another month.
For Aramco’s key customer base in Asia, differentials for the flagship Arab Light grade were raised to Platts Dubai/DME Oman +$3.20/b for loading next month versus +$3/b on July cargoes.
Saudi Arabia announced Monday it would extend its voluntary crude oil production cut of 1 million bpd into next month, while Russia said it was reducing exports by 500,000 bpd for August, raising expectations for a small increase.
Arab Medium was raised to +$2.65/b from +$2.45/b, while Arab Heavy was set at +$1b versus +$0.80/b for July cargoes, underpinned by soaring fuel oil cracks.
The key M1/M3 Dubai cash spread, closely monitored by Saudi Aramco and other Middle East National Oil Companies (NOCs), averaged $1.10/b in June compared to $1.04/b in May.
Premiums for physical barrels were at around two-year lows in early June but rebounded strongly following Saudi cutting production and a near-record buying spree in the Dubai partials window.
Arab Extra Light was unchanged at $2.55/b over Dubai/Oman, reflecting steady Asian distillate and gasoline cracks.
The Quantum average June price for Dubai was steady versus the previous month, averaging $74.97/for August-loading barrels versus $74.93/b on July-loading crude, as global recessionary fears largely overshadowed production cuts.
For Northwest Europe, Arab Light was set at +$3.80/b versus ICE Brent futures, compared to +$3/b on July-loading crude, while Medium was set at +$3.30/b versus +$2.50/b for July.
The Brent/Dubai cash spread crunched to near parity in June, compared to $0.85/b in May, prompting higher Brent-related premiums for Europe. The Brent/Dubai spread has also been inverted since 19 June.
Arab Light for August to the US Gulf was up $0.10/b at +$7.25/b over ASCI (Argus Sour Crude Index), while Medium was at +$7.95/b and Heavy at +$7.50/b, also both $0.10/b higher.