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ADNOC September OSP in line with expectations as light/sour spread widen

Abu Dhabi National Oil Co., or ADNOC’s official selling prices for September-loading crude were largely in line with market expectations and highlight the widening spread between light and heavy crudes, traders told S&P Global Platts.

ADNOC widened Upper Zakum’s OSP discount to Murban by 20 cents/b to 80 cents/b for September loading cargoes.

“Relatively reasonable reflecting the Upper Zakum/Murban spread [through trade last month].” a trader with a North Asian refinery said.

While lighter grades benefitted from strong gasoline and naphtha cracks, demand for medium and heavy crude grades was lackluster last month on weak residual fuel margins.

Second-month gasoline cracks averaged $10.44/b in July compared to $8.82/b in June while naphtha cracks in July surged to a premium of $2.65/b against a discount of 92 cents/b in June, according to Platts data.

In addition, lower Chinese demand has also weighed on medium and heavy grades from the Middle East.

Chinese crude buying has been impacted by smaller import quotas for independent refiners and with state owned enterprises dipping into domestic reserves, traders say.

A decision by OPEC+ last month to raise supplies from August helped cool sentiments late last month, weighing down on spot premiums.

For its lighter crude grades, ADNOC set the price of Umm Lulu at a premium of 5 cents/b to Murban while also narrowing the discount of Das Blend by 5 cents/b to 30 cents/b below Murban.

“I think it’s the support from lights [and] also lot of Das [Blend] was traded in market.” a trader with a South Asian refinery said.

Stronger demand for lighter crude was evident in ADNOC’s OSP differentials for its Umm Lulu and Das Blend grades, traders said.

Market focus now moves to Saudi Aramco, which is due to announce its OSP later this week followed by other producers such as Qatar Petroleum and Iraq’s SOMO.
Source: Platts

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