Saudi Arabia is expected to cut its crude prices to Asian buyers in March amid persistent volatility on the market, Reuters reported.
Four of the six traders who took part in a Reuters survey expected Arab Light’s OSP to fall by about $1 in March, while the other two forecast price cuts of just over $2 a barrel.
Smaller price cuts for Arab Extra Light and Heavy are also expected as naphtha and fuel oil cracks rebounded from last month, boosting demand for these grades in Asia.
Arab Extra Light “should increase relative to Arab Light for March as naphtha is so strong”, an analyst said.
Saudi Arabia’s official selling prices to Asia are set as premiums or discounts to the average of Platts Oman and Dubai prices.
The extent of the price cuts depend on how Saudi Aramco will factor in the spread in its calculations, traders told Reuters.
A sharp widening of the Oman/Dubai spread this week could lead to bigger price cuts, they said, although the spread was little changed if compared on an average monthly basis.
Saudi crude official selling price, usually released by the fifth of each month, set the trend for Iranian, Kuwaiti and Iraqi prices, affecting more than 12mn barrels per day (mbpd) of crude bound for Asia, according to Reuters.
Saudi OSPs to Asia are set as premiums or discounts to the average of Platts Oman and Dubai prices.
