Saudi Arabia has slashed the official selling prices of its crude loading in July to customers in Asia, Europe, and the United States, in a widely expected second consecutive monthly cut amid weakening demand and narrowing spot Middle East crude premiums.
Saudi oil giant Aramco has reduced the price of its flagship Arab Light crude loading for Asia in July by $6 per barrel, setting it at a premium of $9.50 per barrel over the average Oman/Dubai prices, the benchmark for Middle East oil, a pricing document seen by Reuters and Bloomberg showed on Monday.
The price reduction was expected by Asian refiners, who had anticipated the July price of Arab Light for Asia to be slashed by $3 to $8 per barrel compared to the official selling price (OSP) in June. Refiners and traders in a Bloomberg survey expected an average price cut of $5 per barrel.
Saudi Arabia, the world’s top crude oil exporter, slashed the OSPs of all other grades to Asia by $6 per barrel, too, amid slower demand in China and other Asian buyers, and a drop in the spot premiums for Middle East oil in recent weeks.
The price of Saudi crude loading for the Mediterranean and Northwest Europe was slashed by $10 per barrel over the respective benchmark, ICE Brent, while Saudi crude going to the U.S. in July would cost $2 per barrel less than the ASCI benchmark compared to June.
The Saudi price cut was expected to follow a weakening spot market and spot trades in May. Both the cash Dubai premium to swaps and the spot premium for Oman crude slid in May, suggesting tepid spot market demand.
The July price cut is the second consecutive monthly decline in Saudi oil prices versus benchmarks.
Arab Light crude loading for Asia in June is priced at $15.50 per barrel above the Oman/Dubai average, down by $4 a barrel compared to the record high $19.50 premium for May.
By Tsvetana Paraskova for Oilprice.com
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