Middle East crude benchmarks, including Oman, Dubai, and Murban, demonstrated significant gains on Tuesday, reaching their highest levels in over a week. This rally is attributed to strong demand from Asia, fueled by the peak summer season and improved refining margins.
Saudi Arabia, recognized as the largest oil exporter globally, is poised to increase its August crude oil prices for Asian buyers, possibly reaching the highest rates in four months. Spot prices have spiked due to the ongoing Iran-Israel conflict and robust summer fuel demand, according to trade sources.
The official selling price (OSP) for the key Arab Light crude may rise by 50 to 80 cents, positioning it between $1.70 and $2.00 a barrel compared to the previous month, as indicated by a survey of five sources from four refineries. If this prediction holds true, it will mark the highest level for Arab Light OSP since April.
In addition, the August OSPs for other grades like Arab Extra Light, Arab Medium, and Arab Heavy are also expected to see increases of 50 to 60 cents per barrel from July. In cash market activity, the premium for Cash Dubai over swaps increased by 17 cents, reaching $2.90 a barrel.
Recent reports reveal that U.S. crude oil production reached a remarkable record of 13.47 million barrels per day in April, a slight increase from 13.45 million bpd in March, according to the Energy Information Administration’s Petroleum Supply Monthly series. While analysts have slightly raised their oil price projections in light of Middle Eastern tensions, the outlook is tempered by a rise in OPEC+ supply and moderated demand.
Additionally, Norway’s Equinor announced a significant investment of 13 billion Norwegian crowns ($1.29 billion) for the expansion of the Johan Sverdrup oilfield, the largest in western Europe. In a related development, Chevron has decided to close its office in Aberdeen, Scotland, ending its long-standing presence in the region as part of its restructuring efforts.