Top oil exporter Saudi Arabia is expected to cut its official selling prices (OSPs) for Asia in June, tracking weakness in Middle East benchmark Dubai and demand uncertainty amid a new wave of regional COVID-19 outbreaks, a Reuters survey showed.
Sources at five Asian refiners expected the June OSP for flagship Arab Light crude to decrease by an average of 28 cents a barrel, which would become the producer’s first price reduction since December last year.
Their forecasts tracked a loss in benchmark Cash Dubai’s premiums to Dubai swaps, which weakened notably over the second half of April and ended the month at its lowest since Feb. 24.
A resurgence in COVID-19 infections in India has hit local fuel demand and dampened market sentiment, causing refineries there to reduce run rates and slow crude purchases in the spot market, two of the survey respondents said.
“(What’s) more important (is) how first week sales for May will pan out. Basis that call will be taken for (crude) nomination,” one of them added.
In April, Indian state refiners’ local fuel sales declined due to state-level restrictions aimed at stemming a rampant second wave of coronavirus infections, preliminary data showed.