SINGAPORE: Top oil exporter Saudi Arabia is expected to raise the October price of flagship Arab Light crude to Asia to its highest in at least six months on the support of robust demand in the region.
The official selling price (OSP) for Arab Light could rise by 20-50 cents a barrel in October, tracking strength in Middle East benchmark Dubai crude and Asian refining margins, a survey of five refiners and traders showed.
Strength in naphtha margins in particular could also nudge Arab Extra Light’s OSP higher for October, one respondent said.
Weaker fuel oil margins, meanwhile, could curb any price hike for Arab Heavy, respondents said, widening the light-heavy crude price difference for the month. The spread between first and third month cash Dubai prices has narrowed about 40 cents this month, briefly flipping into backwardation, supporting price hikes.
Prompt prices are higher than those in later months in a backwardated market, indicating stronger spot demand for oil.
Complex refinery margins in Singapore also rose to $9 a barrel, a 19-month high on Monday, sparking speculation that Asian refined products would flow to the United States.
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