ADNOC raises June official selling price for Upper Zakum, narrows Murban discount

Dubai — Abu Dhabi National Oil Co., the UAE's biggest oil producer, on Sunday raised its June official selling prices for its Upper Zakum grade and narrowed the discount for its flagship Murban grade against Platts Dubai.

ADNOC said its June OSP for Murban will be a $4.45/b discount to Platts Dubai crude assessments while Upper Zakum will be increased to a premium of 50 cents/b from 10 cents/b in May. It was the second consecutive month that ADNOC set Murban at a discount to medium and sour Upper Zakum. Das Blend was kept at a 35 cents/b discount to Murban and Umm Lulu was held at parity to Murban. The Murban OSP was narrowed from a discount of $6.95/b in May.

Traders were generally expecting a third consecutive month of cuts for Middle East official selling prices, according to the S&P Global Platts survey.

But one respondent said Upper Zakum could be raised by up to 15 cents/b while a Singapore crude trader said ADNOC grades might be hiked because of production cuts. Saudi Aramco got the ball rolling Thursday with surprise price hikes for its June OSPs.

ADNOC is cutting volumes of Murban and Upper Zakum by 20% in June, compared with 15% in May, and is trimming output of Das and Umm Lulu by 5%, the same level of cuts in May, a source familiar with the matter told Platts last month.

The UAE, OPEC's third-largest oil producer, has agreed to cut output from about 4.1 million b/d in April to around 2.5 million b/d in May and June. The reductions are part of OPEC+ cuts that will see 23 members trim output collectively by 9.7 million b/d during these two months.

The OPEC+ coalition will reduce the output cuts gradually through to April 2022 with global demand expected to pick up.