Notice: Trying to access array offset on value of type bool in /customers/5/5/b/ on line 212 Notice: Trying to access array offset on value of type bool in /customers/5/5/b/ on line 212

Saudi Arabia may hold most oil prices to Asia steady in March, Venezuela impact eyed

© Reuters. Saudi Arabia may hold most oil prices to Asia steady in March, Venezuela impact eyed

By Florence Tan

SINGAPORE (Reuters) – Saudi Arabia is expected to keep prices for most of the crude grades it sells to Asia little changed in March, with most attention on heavier grades following sanctions on Venezuela, traders said on Thursday.

The top oil exporter may keep the official selling price (OSP) for flagship Arab Light crude in March unchanged from the previous month, tracking a steady Dubai benchmark, or drop it slightly by 10 cents a barrel, a Reuters survey of five refiners showed.

The March OSP for Arab Extra Light crude could fall by up to 40 cents a barrel after naphtha margins weakened from last month, they said.

The market will be closely watching how state oil giant Saudi Aramco prices its heavier grades after the imposition of sanctions on Venezuelan crude exports to the United States. Venezuela mainly produces heavy .

One respondent expects prices for heavier grades Arab Medium and Arab Heavy to rise in March from February, while the rest expect prices to be little changed.

These grades “have the Venezuela risk premium factor. I bet Saudi will increase more than expected,” the respondent said.

Strong fuel oil margins could also underpin prices for heavier grades that produce more of the residue fuel.

The average fuel oil margin in Singapore so far this month is nearly on par with the Dubai crude price. The margin on producing the residue fuel turned positive late last year due to tight supplies.

Still, Asia’s crude demand is set to drop in the second quarter due to the refinery maintenance season while China and India may end up importing more Venezuelan crude if PDVSA is unable to export to the United States, trade sources said.Saudi crude OSPs are usually released around the fifth of each month, and set the trend for Iranian, Kuwaiti and Iraqi prices, affecting more than 12 million barrels per day (bpd) of crude bound for Asia.

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.

Saudi Aramco officials as a matter of policy do not comment on the kingdom’s monthly OSPs.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.


Leave a Reply