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Saudi Aramco cuts June OSPs for crude bound for Asia, Europe, raises US

Highlights

Asia-bound June OSPs cut 10-30 cents/b

NWE-bound June OSPs cut 50-80 cents/b

Med-bound June OSPs cut 20-40 cents/b

US-bound June OSPs raised 20 cents/b

Singapore — Saudi Aramco cut official selling prices for its crude loading in June and bound for Asia, the Mediterranean and Northwest Europe, but raised prices for the US, the company said May 5.

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For Asia-bound crude, the June differential against Dubai/Oman for Saudi Light was cut by 10 cents/b versus May, while those for Medium and Heavy were cut by 20 cents/b and 30 cents/b, respectively.

The cash Dubai premium over same-month Dubai futures spread -- understood to be a key element in OSP calculations -- fell 15 cents/b to an average of $1.04/b in April, down from an average of $1.19/b in March, S&P Global Platts data showed.

For US-bound crude, differentials for all crude grades were raised by 20 cents/b on May levels.

The June OSPs for Northwest Europe saw the largest cut, with prices cut by 50 cents/b for Light crude and 80 cents/b for Heavy.

For crude destined for Mediterranean, the OSPs were cut by 20-40 cents/b.

Market participants had expected OSPs to be cut given the weakening of the sour crude complex seen in Asia over the past month.

"[June OSPs] look pretty much in line with market expectations," one Europe-based trader said. "It makes the sour complex way more attractive than sweet so far."

Normally the first to issue its prices, Aramco had to settle for second place after ADNOC set its June Murban OSP at $63.35/b over the weekend -- the first to be based off its new Murban futures contract.

Meanwhile, the supply of Saudi crude is set to increase in June as it unwinds a 1 million b/d cut.

"Saudi Arabia will bring back 350,000 b/d crude production of the 1 million b/d voluntary cut in June. The increase will surpass a less than 100,000 b/d month on month increase in Saudi refining runs and crude burn, likely underpinning more crudes for export in June," S&P Global Platts Analytics said in a recent note.

"Any ramping up of rates at the Jizan refinery will reduce the increase of available volumes for export although it is uncertain given the slow recovery of domestic oil demand and product export market."

Grade
Destination
Basis
April OSP
May OSP
June OSP
Change
Superlight
Asia
Oman+Dubai
2.35
2.55
2.35
-0.2
Extra Light
Asia
Oman+Dubai
1.2
1.6
1.5
-0.1
Light
Asia
Oman+Dubai
1.4
1.8
1.7
-0.1
Medium
Asia
Oman+Dubai
0.95
1.45
1.25
-0.2
Heavy
Asia
Oman+Dubai
0.3
0.8
0.5
-0.3
Extra Light
USA
ASCI
1.5
1.6
1.8
+0.2
Light
USA
ASCI
0.95
0.85
1.05
+0.2
Medium
USA
ASCI
0.25
0.15
0.35
+0.2
Heavy
USA
ASCI
-0.2
-0.3
-0.1
+0.2
Extra Light
Mediterranean
ICE Brent
-1.1
-1.4
-1.8
-0.4
Light
Mediterranean
ICE Brent
-1.9
-2.1
-2.3
-0.2
Medium
Mediterranean
ICE Brent
-2.5
-2.5
-2.8
-0.3
Heavy
Mediterranean
ICE Brent
-3.2
-3.2
-3.6
-0.4
Extra Light
NWE
ICE Brent
-1.9
-1.9
-2.5
-0.6
Light
NWE
ICE Brent
-2.2
-2.4
-2.9
-0.5
Medium
NWE
ICE Brent
-2.6
-2.6
-3.3
-0.7
Heavy
NWE
ICE Brent
-3.1
-3.1
-3.9
-0.8