OPEC+ kingpin Saudi Arabia is expected to price its flagship crude to Asia at a record differential for September even as traders see the scope for a weaker spot market the following month, highlighting a potential turning point for the market.
The world’s top crude exporter is expected to price its Arab Light crude to Asia at a $10.80-a-barrel premium to the region’s benchmark for September-loading cargoes, according to the median estimate in a Bloomberg survey of five refiners. At the same time, a slump in margins for Asian processors means that such a hike may dampen any requests for extra barrels, traders said.
Global crude prices are headed in July for their first back-to-back monthly loss since late 2020 as investors attempt to price in the risks of a US recession, tighter monetary policy, and China’s repeated efforts to tame Covid-19. Despite the drop, the oil market’s physical signals remain robust for now, with Saudi Aramco set to release its official selling prices for September next week.
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