In this list

ADNOC's October Asia OSP cuts higher than expectations: sources

Crude Oil

Platts Crude Oil Marketwire

Shipping | Containers

Container market surge puts different pressure on Americas markets

Oil | Energy Transition | Energy

APPEC 2024

Agriculture | Crude Oil | Upstream | Food | Grains | Rice

China's corn production expected to exceed demand in ten years: CNGOIC Director

Energy | Oil | Crude Oil

FOB Straits Price Assessment

Electric Power | Energy Transition | Metals | Renewables | Non-Ferrous | Ferrous | Steel | Carbon | Emissions

Insight conversation: Alejandro Wagner, Alacero

For full access to real-time updates, breaking news, analysis, pricing and data visualization subscribe today.

Subscribe Now

ADNOC's October Asia OSP cuts higher than expectations: sources


Oct. OSPs for all crude grades cut by $1.35/b from Sept.

Milder OSP cuts were expected after term volume reductions

  • Author
  • Jeslyn Lerh
  • Editor
  • Kshitiz Goliya
  • Commodity
  • Oil

Singapore — ADNOC's reduction of official selling price differentials for its October crude oil exports to Asia were higher than expectations, trade sources said Sept. 9.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

ADNOC had set its October OSPs for all its crude grades down $1.35/b from September, according to sources on Sept. 8.

Previously, market participants had expected ADNOC to make milder OSP cuts due to a reduction in term volumes. The company had announced a 30% cut in term allocations for October-loading cargoes, a greater reduction compared to a 5% cut in volumes for September cargoes.

Despite the sharp OSP cuts, trade sources said that persistently weak refining margins are likely to keep demand suppressed, with ADNOC grades unlikely to fetch significant premiums in spot trading.

"The OSPs are better than expected but market seems to not react to it," a sour crude trader from a Western oil major said.

"I think market trading at flat [versus OSP] is a coherent assumption for now," the trader added with respect to ADNOC's light crude grades.

Market differentials for most sour crude grades have been stuck in discounts versus their OSPs, in the previous trading cycle.

"Main point is demand is still poor so I think small discount should be reasonable [even for this month]... Japan demand is not good. India [demand] may be [better], but they bought lots of cargoes already," a sour crude trader from a Chinese oil major said.

On Sept. 8, ADNOC had set the October official selling price for its flagship Murban crude oil at Platts Dubai minus 50 cents/b, down $1.35/b from September.

ADNOC maintained medium sour Upper Zakum's discount to Murban at 20 cents/b in October. This brings the October OSP differential for Upper Zakum to a discount of 70 cents/b against Platts Dubai, down $1.35/b from September.

Meanwhile, ADNOC kept the spreads for Das Blend and Umm Lulu unchanged against Murban for October at a 35 cents/b discount and at parity, respectively. This brings the October OSP differential for Das Blend to a discount of 85 cents/b and for Umm Lulu to a discount of 50 cents/b against Platts Dubai.

Spot market differentials may find support from recent OSP cuts, but trade sources said that weak demand is expected to still weigh on recovery.