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Saudi Arabia May Cut June Crude Prices To Asia From Record Highs

Global markets were rattled last month by western sanctions on Russia, the world's biggest combined crude and oil products exporter, that could curb supplies, pushing Middle East spot premiums and term prices to record highs

Photo Credit : Reuters

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Top oil exporter Saudi Arabia may cut prices for crude grades sold to Asia in June after benchmarks slumped from records in the previous month as COVID lockdowns curbed demand in China, the world's biggest crude importer, traders said on Friday.

Global markets were rattled last month by western sanctions on Russia, the world's biggest combined crude and oil products exporter, that could curb supplies, pushing Middle East spot premiums and term prices to record highs.

However, COVID-19 restrictions across China cooled demand causing prices to tumble this month. Also, large volumes of Russian oil displaced by European sanctions are still heading to China and India while Japan and South Korea are releasing strategic oil reserves, easing supply concerns. 

However, COVID-19 restrictions across China cooled demand causing prices to tumble this month. Also, large volumes of Russian oil displaced by European sanctions are still heading to China and India while Japan and South Korea are releasing strategic oil reserves, easing supply concerns. 

The price cuts are because of weak refining margins in China from the COVID lockdowns and a lack of product export quotas that prevent Chinese refiners from shipping out excess fuel, one respondent said.

Another respondent, the only one who is expecting smaller price reductions at $3-$4 a barrel, said he expects strong refining margins to support OSPs.

Asian oil refiners are reaping their highest profits ever this week, spurred by higher fuel demand and fuel exports to Europe to replace the Russian shortfall.

The price cuts are because of weak refining margins in China from the COVID lockdowns and a lack of product export quotas that prevent Chinese refiners from shipping out excess fuel, one respondent said.

Another respondent, the only one who is expecting smaller price reductions at $3-$4 a barrel, said he expects strong refining margins to support OSPs.

Asian oil refiners are reaping their highest profits ever this week, spurred by higher fuel demand and fuel exports to Europe to replace the Russian shortfall.


(Reuters)


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