Saudi Arabia seen cutting May crude prices to Asia – Reuters survey

According to a Reuters survey of six refiners and traders, the Organization of the Petroleum Exporting Countries (OPEC)’s top oil producer, Saudi Arabia, is seen cutting prices for all crude grades it sells to Asia in May.

The reason behind the discount in prices is to reflect weaker prices for its Middle East benchmark Dubai crude, the respondents noted.

Key Findings:

“The official selling price (OSP) for flagship Arab Light crude could fall by 50-70 cents, to the lowest in six months.

“We expect cuts of 50-60 cents across all grades,” one of the respondents said, in line with market changes last month.

The price spread between the first and third month Dubai spot prices widened by 55 cents a barrel in contango in March versus February.

Most of the respondents expect similar price cuts across all grades in May, although one person said he expects a smaller cut for Arab Extra Light’s OSP on support from firm naphtha margins.

He also expects a bigger price cut for Arab Heavy because of widening losses in producing fuel oil.”