Saudi Arabia, the world’s top oil exporter, is expected to raise official selling prices for all of its crude grades sold in Asia next month on the back of strong demand and refining margins, refining sources said during a briefing. a Reuters survey this week.
Saudi Arabia typically sets official selling prices (OSPs) for its crude for the following month around the 5th of each month, usually after the monthly OPEC+ meeting, scheduled for February 2.
The Kingdom is expected to raise all its prices for Asia for March, seven refining sources told Reuters in a flash survey on Tuesday and Wednesday.
The expected price rise would follow a February price cut announced in early January, when Saudi Arabia lowered its PSOs to the lowest premium to regional benchmarks in three months, amid the rapid spread of Omicron and the increased supply from OPEC+.
Expectations for March, however, are an increase in Saudi PSOs, due to higher Middle East benchmarks on which the price of rough to Asia is priced, resilient demand in the Omicron wave, and Refining margins strengthened for jet fuel and diesel, Asia refining sources told Reuters.
The quality of Saudi Arabia’s flagship Arab Light crude for the Asian market in March could be up about $0.60 a barrel from February’s price, the sources added.
For February, the Saudis had cut the price of Arab Light for Asia from $1.10 a barrel to $2.20 a barrel against the Oman/Dubai benchmark, from which exports from the Middle East to Asia are valued. The premium over Oman/Dubai is the lowest for the Arab Light category in three months.
For March, Reuters refining sources expect the price of Arab Light to rise $0.45 to $0.80 a barrel from the February price at a premium of $2.65 to $3. per barrel compared to Oman/Dubai.
Stronger margins on jet fuel and gas oil suggest lighter grades could see higher price increases than heavier crude varieties, refining sources told Reuters.
By Tsvetana Paraskova for Oilprice.com
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