Arab Today, arab today saudi cargoes ease mideast oil prices
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Saudi cargoes ease Mideast oil prices

Arab Today, arab today

Arab Today, arab today Saudi cargoes ease Mideast oil prices

Singapore - Arabstoday

A slide in Middle East crudes to the lowest in almost a year relative to benchmark prices is showing no sign of ending as Saudi Arabia offers extra cargoes to overseas refiners and cuts export costs. Murban, the main export grade of Abu Dhabi, traded on Friday 10 cents below monthly prices set by the Abu Dhabi National Oil Company, the largest discount since August. It has averaged 29 cents higher this year. Qatar Marine was at a discount of 65 cents, the most in more than a year. Both grades may slip further this month, according to four traders surveyed by Bloomberg. Saudi Arabia, the Organisation of Petroleum Exporting Countries\' (Opec) biggest producer, is offering additional cargoes after it failed to persuade fellow Opec members to raise output targets at a June 8 meeting, according to six refiners who received the proposals. Saudi Arabian Oil Co., the nation\'s state producer, has cut the price of some July shipments to Asian buyers amid concern oil as high as $100 a barrel is slowing the global economic recovery and threatening demand. \"A lot of the decline goes back to Saudi Arabia itself and the latest tranche of official prices,\" said Eugene Lindell, an analyst at JBC Energy GmbH, a Vienna-based researcher that counts ConocoPhillips and Statoil among its clients. \"When the kingdom does such a large discount, you tend to see less action on the spot market because those customers that can will try to max out their volumes of Saudi crude. That means they are less inclined to shop on the spot market.\" Murban last dropped to as much as 10 cents below its benchmark price on August 18 last year as refiners cut demand amid shrinking margins. The discount disappeared within two weeks, according to data compiled by PVM Oil Associates Ltd., a London-based broker. Saudi Oil Minister Ali Al Naimi said after the deadlocked Opec meeting in Vienna that his country would keep meeting the needs of the market \"regardless of the disagreement.\" The nation, together with Kuwait, Qatar and the UAE, had proposed increasing Opec production by 1.5 million barrels a day. They were blocked by members including Libya, Angola, Ecuador, Algeria, Iran and Venezuela, Al Naimi said. Crude prices above $100 a barrel are \"weighing\" on developed economies, the Paris-based International Energy Agency said Friday in its Medium-Term Oil Market Report. Murban crude was at $111.75 a barrel Friday, according to PVM data. Prices have risen 23 per cent in 2011. Qatar Marine cost $106.93, up 20 per cent this year. Dhahran-based Saudi Aramco has offered extra cargoes to refiners in countries including India, South Korea, Taiwan, Japan and China, six people from companies based in those markets said last week, declining to be identified because the negotiations are confidential. A Saudi industry official with knowledge of the matter had said June 10 that Aramco planned to pump more crude, without saying by how much. \"The market would like to see Saudi barrels and if they are able to get them and the prices are reasonable then Asia will certainly buy more,\" said Ehsan Ul Haq, a senior market analyst with KBC Energy Economics in Walton-on-Thames, England. \"Whether demand is lower, it\'s too early to say.\" Prices may still be supported as European crude costs outpace those from the Middle East, limiting the attractiveness for Asian refiners of alternative grades from Russia or West Africa, which are priced against London-traded Brent, the benchmark for more than half of the world\'s oil. The Brent-Dubai exchange for swaps for July, an indicator of the relative value of oil from the two regions, widened to $8.38 a barrel June 13, a record in data going back to 2006, according to PVM data, a London-based broker. Aramco cut the formula price for its Arab Extra Light crude to Asia by $1.40 a barrel on June 5, trimming it to $3.45 above the average of Oman and Dubai grades. It reduced the price of Arab Super Light to Asia the most, by $2.90, to a premium of $4.85 a barrel, Aramco said in an e-mailed statement. From / Gulf News

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