Demand for sour crude grows in Asia amid decline in Saudi production
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According to traders surveyed Bloomberg, there is growing demand in Asia for more sour crudes. Last Friday, futures for Oman Crude were higher than futures for less sulphurous UAE Murban. Experts explain this by reducing the production of the main grade of oil in Saudi Arabia – medium-sulphurous Arab Light. In this situation, Asian countries that actively buy such oil are forced to pay more for alternative supplies. The premium for September futures on the medium-sulphur grade Upper Zakum reached $1.80 per barrel – the same premium was given last week on futures contracts for the low-sulphur grade Murban.
In early June, OPEC + at a meeting in Vienna adopted solution to limit production by another 1.4 million barrels per day from 2024. Last week, the Saudi government confirmed the desire of the kingdom to step up measures to maintain the stability of the oil market. Earlier it was reported that Riyadh will extend the voluntary cut in oil production by 1 million barrels per day, which began in July, to August. The Kingdom’s Council of Ministers also confirmed the possibility of extending this voluntary cut beyond August.
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