SINGAPORE Aug 3 (Reuters) - The Middle East crude market held steady on Wednesday as traders awaited the new monthly official selling prices (OSPs) from Saudi Arabia to gauge the sentiment for October trading, while eyeing the situation at Formosa.
Formosa Petrochemical Corp is in discussions with term crude suppliers in Saudi Arabia and Kuwait to defer imports and has not sold any cargoes in distress yet, trade sources said.
The Taiwanese refiner shut its 540,000 barrels per day (bpd) refinery in Mailiao, Asia's fifth-largest, following the seventh fire in a year on Saturday. The plant will remain closed for at least two weeks, and any restart will be subject to government approval.
*SAUDI OSP PREVIEW
- Top exporter Saudi Arabia may reduce the official selling prices (OSPs) of September crude for Asian clients, a Reuters poll showed, as refinery shutdowns in Taiwan, China and India curb demand for Middle East grades.
Two refinery upsets and planned repairs at a third plant have bolstered the bearish outlook for the region's heavy sour crude, which constitutes the main feedstock in all three cases.
The biggest decline was expected for Arab Heavy, which would drop by as much as 60 cents, the poll showed, compared with an average decline of 20 cents for Arab Light. All traders agreed the spread between sweet and sour grades would widen because of stronger naphtha cracks and attractive gas oil margins.
"With the refinery shutdowns, overall crude market sentiment is quite weak, so they cannot ignore this kind of sentiment even though gas oil and naphtha cracks are quite supportive," said a trader with a northeast Asian refiner of Saudi crude.
