TM:Saudi to announce monthly selling prices of crude oil
RIYADH: Saudi Arabia will try to ensure global oil markets have enough supply even as the International Energy Agency coordinates an emergency release of crude reserves from member countries.
State producers including Saudi Arabian Oil Company are set to announce monthly selling prices for crude as traders wait to see if lower costs encourage sales. Abu Dhabi plans to ship more Murban crude in August, while reducing supplies of other grades.
Saudi Arabia will make good on its pledge to provide markets with the amount of oil they need, a person familiar with policy at the country’s Oil Ministry said last week. It will do so regardless of the IEA’s coordination this month of the release of 60 million barrels.
The Saudis estimate that annual consumption will increase next year by 1.2 million to 1.5 million barrels a day, and the kingdom will contribute to satisfying demand, according to the person, who declined to be identified because he isn’t authorized to speak on the matter. Ministry officials in Riyadh didn’t respond to calls for comment.
The Saudi state producer, known as Saudi Aramco, will announce official prices this week for crude sold in August under long-term contracts, according to its normal practice of releasing prices by the fifth day of each month.
“They will try to export more crude, and eventually we might expect that to bring down prices,” said Thad Malesa, an independent oil analyst based in Dubai. “Kuwait and Abu Dhabi are also putting more on the market.”
Long-term contracts
Abu Dhabi National Oil Company (Adnoc lowered its retroactive prices on all four crude grades shipped under long-term contracts in June, at a slower pace than global benchmarks. The state-run producer in the capital and largest emirate of the United Arab Emirates cut prices for crude shipped last month by one per cent to 1.5 per cent, according to an e-mailed list.
Adnoc will ship more Murban crude, its most-abundant grade, in August than it is scheduled to supply in July. The company will ship five per cent less Murban than it committed to under long-term contracts for August, compared with 10 per cent less that it agreed to for July.
West Texas Intermediate, the North American benchmark, ended the second quarter at $95.42 a barrel, 11 per cent lower than at the end of March, and $4.04 a barrel higher than the 2010 close. European benchmark Brent crude declined 4.2 per cent in the quarter to $112.48 a barrel, compared with $94.75 a barrel at the end of 2010.
In regional trading, Oman oil futures declined three per cent to finish the quarter at $106.55 a barrel, according to data. Omani crude ended 2010 at $88.74 a barrel. Dubai crude slipped 2.9 per cent in the three months through June, to close at $106.33 a barrel. The grade increased from $88.54 a barrel at the end of the year.
The spread between Dubai and Brent narrowed over the last three months as the European benchmark, a higher-quality crude, fell faster than heavier and more sulfurous Middle Eastern grades. Dubai crude sold for $6.15 a barrel less than Brent at the end of June, compared to a $7.89-a-barrel spread at the end of March.
Oman crude’s official selling price fell for a second month in August to $107.84 a barrel, based on the average of daily futures settlement prices on the Dubai Mercantile Exchange. That’s 1.2 per cent below July’s level of $109.20.
