RTRS:Middle East Crude-Sentiment up on Saudi OSP cut
SINGAPORE, May 7 (Reuters) - Sentiment in the Middle East crude market
firmed on Monday, on expectation that demand for sour grades could strengthen
after Saudi Arabia made a bigger than expected cut in its official selling
prices to Asia.
Top oil exporter Saudi Arabia cut the OSP of its flagship Arab Light crude
to Asia by $1.30 in June, state-owned firm Saudi Aramco said on Saturday.
The cut by the Saudis could prompt other Middle East producers to reduce
their OSPs, which are due out over the next few days, and could lead to a
rebound in prices for July-lifting cargoes when trading kicks off next week,
traders said.
* SAUDI OSP
The June OSP for Arab Light crude has been set at the Oman/Dubai average
plus $1.15 a barrel, down from $2.45 a barrel in May.
The cut was deeper than the 80 cents traders had expected, following a
narrowing of Dubai crude's backwardation, reflecting poorer demand for cargoes
to be delivered immediately.
State oil giant Saudi Aramco sets its crude prices based on recommendations
from customers and after calculating the change in the value of its oil over the
past month, based on yields and product prices.
* TRADES
- ChinaOil sold two Dubai partials, one each to Arcadia and Mercuria, at
$109.15-$109.20 a barrel.
* MARKET NEWS
- The United Arab Emirates and Saudi Arabia have promised to fill any gap in
South Korea's oil imports if Iran decides to cut its crude exports to the
country, South Korean Minister of Strategy and Finance Bahk Jae-wan said on
Monday.
- Qatar's energy minister said on Monday oil production in the Middle East
remained reliable and there was no shortage of supply in the
market.
- India's Mangalore Refinery and Petrochemicals Ltd (MRPL) MRPL.NS has
restarted two of three crude distillation units (CDUs) at a 300,000
barrel-per-day (bpd) plant that was closed more than a week ago because of water
shortages, traders said on Monday.
- Japanese refiner Cosmo Oil Co 5007.T said on Monday it started the
scheduled maintenance on the 120,000 barrels per day (bpd) No.2 crude
distillation unit (CDU) at its Chiba refinery on May 3.
CRUDE Price Prev Chang %
chang
JULY Oman diff to Dubai 0.68 1.19 -0.51
JUNE Brent 112.39 115.5 -3.11 -2.69
JULY Dubai 108.52 111.6 -3.14 -2.81
JULY DME Oman 109.20 112.8 -3.65 -3.23
JULY Brent/Dubai EFS 3.87 3.84 0.03
