Saudi, UAE may cut crude prices for Asia amid weak demand

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A Saudi oil company official watches work at a rig. Photo – News.com.au

Top world oil exporter Saudi Arabia will probably cut prices for most grades of crude oil sold to Asia in September, after two months of increases, due to weak demand, a Reuters poll showed on Wednesday.

The producer could cut the September official selling prices (OSPs) for Arab Medium and Heavy by up to $1 a barrel from the previous month, and the OSP for Arab Light and Arab Extra Light by 60 cents a barrel, a Reuters report said basing data on the median of estimates by six traders and refiners.

Traders have been waiting for announcement of OSPs from Saudi Arabia and other top Middle Eastern producers in order to assess the direction of the October-loading market. Rising supply and declining demand have been weighing on sentiment, dragging the spot market lower.

Meanwhile, Abu Dhabi National Oil Co (ADNOC) is expected also to cut its OSP by about 10 cents a barrel while the OSP for Qatar Marine may be lowered by 60 cents a barrel, traders said.

The official selling price (OSP) for Oman crude in September, based on the average of the daily settlement prices for the front-month contract, will rise by $5.05 to $99.47 a barrel, according to Reuters calculations based on data from the Dubai Mercantile Exchange (DME).

A trade source said on Wednesday Qatar, one of OPEC’s smallest producers, has notified at least one Asian buyer that it will supply Land crude at full contracted volumes for September, unchanged from August levels.

US President Barack Obama announced new U.S. sanctions on Tuesday against foreign banks that help Iran sell its oil and said the measure would add pressure on Tehran for failing to meet its international nuclear obligations.

Iraq’s oil exports rose to 2.516 million barrels per day (bpd) on average in July compared with 2.403 million bpd in June, the head of the State Oil Marketing Organisation (SOMO) told Reuters on Wednesday.

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