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Saudi Arabia to raise Asia prices for third month in a row in June
Saudi Arabia is expected to raise the price of its heavier grades to Asian buyers for the third month in a row in June as refinery maintenance in Asia drives margins above $10 a barrel, a Reuters survey found.
- Reuters
- Published: 00:00 May 4, 2007
Singapore: Saudi Arabia is expected to raise the price of its heavier grades to Asian buyers for the third month in a row in June as refinery maintenance in Asia drives margins above $10 a barrel, a Reuters survey found.
Lighter, middle distillate-rich Arab Extra Light as well as naphtha-rich Super Light crude should also gain on the back of stronger gas oil prices and strong refinery economics, the survey of refinery and trade sources showed yesterday.
"I feel the OSPs are high already but they might lift them again. Margins are good," a trader said.
The Saudi official selling prices are usually released around the fifth of each month before crude starts loading, and set the trend for Iranian, Kuwaiti and Iraqi prices, altogether impacting the price of over 8 million bpd of crude sold to Asia.
Traders polled expected the heaviest grades - Arab Heavy, Arab Medium and Arab Light - to rise by an average 30 cents a barrel, putting them at their highest since April 2006 thanks in part to Opec production curbs imposed over the past six months.
The grades have rallied in the past three months as healthy product demand triggers a sharp rebound in crack spreads.
The front-month fuel oil crack to Dubai swaps improved to a $10.07 discount in April, versus a $12.80 discount in March, said.
The front-month gas oil crack to Dubai also rose from a premium of $14.37 a barrel to a $16.07 premium in April, the highest average since last August.
Overall refining margins for sour crude benchmark Dubai to be cracked in Singapore stood at a strong $12.89 a barrel on Thursday morning, with the last two-week average at almost $10 a barrel - the highest since June 2006.
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