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Gulf News reported that Saudi Arabian heavy crude sold to Asia is heading for the highest level in 22 months.
Gulf News reported that Saudi Arabian heavy crude sold to Asia is heading for the highest level in 22 months.
The market news is quoted as saying:
Arab Heavy crude for November may cost $1.40 a barrel less than Oman and Dubai grades when prices are announced next week, according to the median estimate of nine refiners surveyed by Bloomberg. That would be the smallest discount for the country’s densest crude since January 2010 and compares with $2.15 less than the benchmark grades for October cargoes. Orders from Japan and China for fuel oil, a residue of crude refining typically used for heating and shipping, are allowing state-run Saudi Arabian Oil (Aramco), the world’s biggest crude exporter, to charge more for its lowest-quality grades at a time when oil prices are falling.
“Fuel oil cracks have been strengthening,” said Ehsan Ul Haq, a senior market analyst with KBC Energy Economics in Walton-on-Thames, England, who correctly predicted this month that Saudi Arabia would raise October cargo prices. “Strong fuel oil cracks mean Saudi Arabia would have to increase prices for heavier grades.”