Saudi Arabia could cut crude prices to Asia in May

Saudi Arabia is expected to cut prices for all crude grades it sells to Asia in May, to reflect weaker prices for its Middle East benchmark Dubai crude, Reuters reported, citing its survey of six refiners and traders.

“We expect cuts of 50-60 cents across all grades,” one of the respondents said.

The official selling price (OSP) for Saudi flagship Arab Light crude could fall by 50-70 cents, to the lowest in six months, the survey revealed.

Most respondents expect similar price cuts across all grades in May, although one person said he sees a smaller cut for Arab Extra Light’s OSP on support from firm naphtha margins. He also expects a bigger price cut for Arab Heavy because of widening losses in producing fuel oil.

Saudi crude OSPs are usually released around the fifth of every month, and set the trend for Iranian, Kuwaiti and Iraqi prices, affecting more than 12 million barrels per day of Asia-bound crude.

State oil firm Saudi Aramco sets its crude prices based on recommendations from customers and after calculating the change in the value of its oil over the past month, based on yields and product prices.