Saudi Arabia expected to lift November crude prices to Asia

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By Siyi Liu

SINGAPORE (Reuters) -Saudi Arabia, the world’s biggest oil exporter, is expected to lift November crude oil prices for Asian buyers to track gains in Middle East benchmarks, although rising supplies would limit those increases, refining sources said on Monday.The November official selling price for flagship Arab Light crude will likely rise 20-40 cents a barrel to between $2.40 and $2.60 a barrel after sharp price cuts for October, six refining sources said in a Reuters survey.

The November OSPs for other crude grades – Arab Extra Light, Arab Medium and Arab Heavy – could increase by 30-60 cents a barrel compared with October, the survey showed.

These forecasts are in line with a monthly increase of 52 cents per barrel in cash Dubai’s premium to swaps so far in September, Reuters data showed. [CRU/M]

The premium hit $3.63 a barrel on September 15, a 6-month high, as supply risks from potentially more sanctions on Russian and Iranian oil rose. However, the market rally lost steam last week as news of Iraq’s Kurdistan region resuming crude exports added to oversupply fears.

Saudi Arabia is likely to avoid big price hikes as negotiations with its clients for 2026 term supply are ongoing, one of the survey respondents said, adding that a jump in freight rates has also limited refiners’ ability to pay more for crude.

OPEC+, a group comprising the Organization of the Petroleum Exporting Countries and its allies, will likely approve another oil production increase of at least 137,000 barrels per day at its meeting on Sunday, as rising oil prices encourage it to seek a higher market share.

Saudi crude OSPs are usually released around the fifth of each month, and set the trend for Iranian, Kuwaiti and Iraqi prices, affecting about 9 million barrels per day of crude bound for Asia.

State oil giant Saudi Aramco sets its crude prices based on recommendations from customers and after calculating the change in the value of its oil over the past month, based on yields and product prices.

Saudi Aramco officials as a matter of policy do not comment on the kingdom’s monthly OSPs.

Below are expected Saudi prices for November (in $/bbl against the Oman/Dubai average):

October Change est.

November OSP

Arab Extra +2.50 +0.30/+0.4 +2.80/+2.90

Light 0

Arab Light +2.20 +0.20/+0.4 +2.40/+2.60

0

Arab Medium +1.75 +0.30/+0.5 +2.05/+2.25

0

Arab Heavy +0.40 +0.30/+0.6 +0.70/+1.00

0

Source: Reuters, trade

(Reporting by Siyi Liu in Singapore; Editing by Florence Tan and Jan Harvey)