Crude benchmarks in the Middle East experienced a decline on Monday, with Dubai’s spot premium reaching its lowest level in over seven weeks. This drop can be attributed to increasing expectations that OPEC+ will raise oil supply. The sell-off for Dubai prices commenced late last week, fueled by indications of a potential output increase in June.
Additionally, Kazakhstan announced it would prioritize its national interests over OPEC+ decisions when determining its oil production levels. During an upcoming meeting scheduled for May 5, some members of the Organization of the Petroleum Exporting Countries and their allies, collectively known as OPEC+, are anticipated to propose an acceleration of oil output hikes for the second consecutive month. This situation has contributed to cautious sentiment in the market.
In Singapore trading, cash Dubai’s premium over swaps decreased by 29 cents to $1.14 a barrel, marking the lowest level since March 6. Meanwhile, South Korea’s S-Oil, which is predominantly owned by Saudi Aramco, reported losses in its first-quarter results from refining and petrochemical operations. The company foresees potential impacts on second-quarter margins due to ongoing U.S. tariff negotiations and overall market volatility.
On the corporate front, Saudi Arabia, the world’s largest oil exporter, is expected to slightly increase crude prices for Asian buyers in June, marking a change after three months of stability. Kuwaiti Petroleum’s subsidiary recently acquired a 25% stake in China’s Wanhua Chemical’s petrochemical business, with the deal valued at $638 million. Furthermore, the Abu Dhabi National Oil Company (ADNOC) has plans to issue 10-year dollar-denominated Islamic bonds, known as sukuk.
Lastly, shares of India’s Reliance Industries surged by 4% as investors praised the company’s solid performance in its telecom and retail sectors after a quarterly profit exceeding expectations.