The price of cargoes of spot crude from Russia to Angola to Brazil plummeted this month after the decline in purchases by major importers, including China. For this reason, other Middle Eastern producers could also be forced to cut oil prices
For the first time since the recovery in oil prices began, three months ago, Saudi Arabia and other Middle Eastern producers are under severe pressure to reduce the price of the barrel, "a sign of how the demand trend has started to slow down: the change does not herald the return to ultra-low oil prices in March and April, but rather indicates that futures are looking to move much above $ 40 a barrel, "according to the Washington Post .
IN THE NEXT DAYS THE PRODUCERS WILL REVEAL THE SEPTEMBER PRICES
The new peaks of coronavirus cases are in fact depressing the demand for fuel, due to local blockages, missed returns to offices and canceled holidays that limit the movement of people. But while these phenomena slow down the recovery in consumption, crude production is increasing, with a potential reversal of the balance between excess supply and demand.
“A great indication of how far the dynamics of the global market have really moved will become clear in the next few days, when producers in the Middle East will reveal their September prices. Traders and refiners in Asia and Europe expect Saudi Arabia to reduce its so-called official selling prices for the first time since the Opec + alliance is in place. "
"The Osp (the official sale price that is offered to all buyers on the market for a certain period of time usually using a formula or a differential with respect to the market benchmarks, ed ) are always important, but especially in times of imbalance of the market – said Bjornar Tonhaugen, head of the oil markets at Rystad Energy in the Washington Post -. Saudi Arabia always has the pulse of customer demand. "
SAUDI ARABIA LEADER
In general, the other Persian Gulf nations almost always follow what is done by Saudi Arabia in terms of official sales prices. The physical market, in turn, influences oil futures trading on the stock exchanges in London, New York and elsewhere.
ARAMCO SHOULD CUT THE PRICE OF 48 CENTS
“Saudi Aramco, the state-owned oil company, is expected to lower the official sale price for its FlagshipArab Light grade by 48 cents per barrel for September sales in Asia, as evidenced by the median estimate of eight traders and refiners across the region. It would be the first drop in four months after a series of increases that occurred after the decided cuts in Opec + ".
OTHER MANUFACTURERS MAY ALSO CUT PRICES
The price of cargoes of spot crude from Russia to Angola to Brazil plummeted this month after the drop in purchases by major importers, including China. Refining margins are still well below their average during the year also in the Asian oil pole of Singapore, and this weighs on the ability of processors in the region to make profits and pay more for crude oil. For this reason, according to the Washington Post , “other Middle Eastern producers could be forced to cut the PSOs when OPEC and its allies like Russia begin to loosen the production lines starting next month. The global reference Brent crude is ready for the first monthly gain, but August could prove more demanding as the increase in supply affects a global economy that is still far from bringing the virus under control ".
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/perche-saudi-aramco-e-pronta-a-tagliare-i-prezzi-del-petrolio/ on Sat, 01 Aug 2020 05:22:43 +0000.