 Adnoc has cut the official selling price (OSP) of its main export crude grade by 82 cents, surprising analysts and customers alike, according to analyst firm Platts, McGraw, Hill financial.
Adnoc set the OSP for February-loading Murban, its main export crude grade, at $109.95/barrel, equivalent to a $4.914/b premium to the average of Platts front-line Dubai assessments published in February. The premium is down 82 cents from January’s $5.73/b.
Traders were expecting a 40 cents/b cut for Murban’s OSP differential to Dubai, given that the grade fell to a discount of 60 cents/b to its OSP during trading for April-loading cargoes in February.
“We expected a cut of 40 to 50 cents but they cut by 82 cents,” said a trader at a North Asian refinery. “It will be appreciated.”
Adnoc also slashed the differentials for Lower Zakum and Umm Shaif, the other two light grades of ADNOC’s four main export grades.
Lower Zakum for February was set at a premium of $4.614/b, down 92 cents, while Umm Shaif was cut by $1.02/b to a premium of $3.914/b. Both grades traded at deep discounts during February.
Demand for April-loading light sour crude from Abu Dhabi slumped as May would see the peak of the Asian refinery turnaround season with 2.13 million b/d of crude distillation capacity shut for maintenance. Japan would have 915,000 b/d closed during May, when April-loading cargoes would typically arrive in Asia.
Murban’s OSP differential cut “reflects the current market situation,” said a Singapore-based trader at a refinery.
While buyers were pleased with the cuts made to the light sour grades, there was some disappointment with the Upper Zakum OSP differential. It was set at a premium of $1.664/b, down 42 cents. The grade was assessed as low as minus 80 cents/b during February.
