Page 17 - MEOG Week 22

MEOG
neWs In brIeF
MEOG
Arabia -- which together supplied around 40% of India’s oil imports in 2019 -- have been offering cargoes at very attractive
prices recently, said Sanjiv Singh, chairman and managing director of Indian Oil Corp.. Marketers SOMO and Aramco offered Asian buyers crude at the steepest discounts in more than a decade last month amid the price war.
Middle Eastern oil being sold at steep discounts to region’s benchmarks
“When you look at the discounts being offered by Middle East countries over and above the market prices, definitely these crudes become more attractive,” Singh said in an interview. “When we are buying any crude, at that particular time whatever is the best offer, we take.”
The aggressive pricing from Middle Eastern suppliers may make it harder for producers such as the US, Nigeria, Mexico and Russia to win more market share in India. All four producers sold more crude to the nation last year than they did in 2018, with American supplies almost doubling, as imports from the Persian Gulf nations fell.
Middle Eastern producers seek to retain dominant position but they’ll also be competing for a share of a much smaller pie, with Indian oil demand expected to take until the end of 2020 to get close to a full recovery from the coronavirus.
Gasoline sales are currently running at about half of last year’s average, while diesel is at 60%, according to Singh. At the peak of oil demand destruction in India, consumption of gasoline and diesel fell to 30%-35% of 2019 levels, he said. The chairman of the state- owned refiner said he doesn’t expect overall demand to start picking up until the quarter
starting in October.
bLoomberG
Saudi could set trend for higher oil prices in June
Saudi Arabia is likely to increase the price for its oil bound for Asia in July, a Reuters survey of five refinery sources showed on Monday.
This is the second consecutive month for oil price hikes in Saudi Arabia, which come on the back of reduced supply out of the Middle East region due to the OPEC+ cuts.
The pricing of Saudi crude, typically released around the fifth of each month, generally sets the trend for the pricing for Asia of other Gulf oil producers such as Kuwait, Iraq, and Iran. The pricing of Saudi Aramco, the Kingdom’s oil giant, affects as much as
12 million barrels per day (bpd) of Middle Eastern crude grades going to Asia.
According to the Reuters survey, refiners in Asia expect Saudi Arabia to raise the price for its flagship Arab Light crude grade for July by $3.80 per barrel on average.
In June, Arab Light is sold in Asia at a $5.90 a barrel discount to the Oman/Dubai average, after last month Saudi Arabia raised the price for all its crude oil grades to all regions for June in a move that analysts saw as the start of demand recovery. The price
of Arab Light for June was raised by $1.40
a barrel from May. Asian refiners had not expected the increase in Saudi prices for June—they were predicting that the Kingdom would cut the price of its oil.
For July, the refinery sources polled by Reuters expect Saudi Arabia to lift the prices
for all its crude grades, especially Arab Extra Light, compared to the heavier grades.
Refining margins in Asia have worsened in recent weeks because of the stronger Dubai/ Oman benchmark prices that increase import costs. While expectations are that the Saudis will raise prices, the increase may not be
by much because of the still weak refining margins, according to the Reuters survey. oIL PrICe
Price of Omani oil continues to rise
The Price of Omani oil continued to rise, with prices for delivery by next August reaching USD $40.39 on the Dubai Energy Market on Tuesday .
A statement issued online by the Oman News Agency (ONA) said, “The official price of Oman Oil on the Dubai Energy Market for delivery by next August reached $40.39 today.” tImes oF oman
DME August Oman crude trades above $40/b
Benchmark Oman crude oil trading on the Dubai Mercantile Exchange traded above $40 per barrel Monday for the first time
in almost three months, making it the first internationally traded crude oil futures contract to break the $40/b mark since the oil price recovery started early May.
Front-month August DME Oman traded at a high of $40.09/b, up $0.30/b from Friday’s settlement price of $39.79/b. Oman last traded above $40/b on March 6 of this year.
The DME Marker Price for Monday was set earlier in the day at $39.62/b. The Marker Price is used by Middle East producers Saudi Arabia, Kuwait, Bahrain, Oman and Dubai in calculating the monthly Official Selling Price (OSP).
Middle East prices have recovered faster than those in Europe, with DME Oman trading at around $2/b over the Brent North Sea benchmark on Monday.
ame InFo
Week 22 03•May•2020
w w w . N E W S B A S E . c o m
P17