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Bloomberg: Saudi Arabia may raise oil prices for Asia

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28 July 2022

Saudi Arabia is expected to raise the price of its flagship oil for Asia in September, although traders see potential for spot price cuts next month, PRIME quotes Bloomberg. The coming months could be a turning point for the oil market, traders say.

 Arab Light crude for September delivery to Asia could sell for a record high premium over the Oman/Dubai price marker. According to the median estimate of refiners surveyed by Bloomberg, the premium could be $10.80 per barrel. At the same time, the drop in the margins of Asian refineries may result in a reduction in demand for oil from Saudi Arabia, traders say.

 World oil prices in July may show a second consecutive monthly decline for the first time since the end of 2020. Oil futures came under pressure amid risks of a US recession, tightening monetary policy and China's efforts to fight the coronavirus. At the same time, prices in the physical market are still high. Saudi Aramco will publish official selling prices for September next week.

 Some Asian refineries have been preparing to cut operating capacity since September. Refinery workloads in the region have peaked in recent months as the conflict in Ukraine has shifted trade flows and driven gasoline prices to record highs. Any pullback in fuel prices could trigger a reduction in oil demand from refineries in the coming months.