Saudi Arabia may cut prices for most crude grades in October for Asia. This came as a poll of six refiners showed that the Middle East benchmark Dubai weakened in August this year.
In October, the official selling price (OSP) for flagship Arab Light crude is expected to fall by 20-40 cents a barrel. It is tracking a 17-cent drop in Dubai’s market structure, four of the polled refiners said, while the remaining two expect prices to fall more than $1 a barrel.
In July, the Organization of the Petroleum Exporting Countries and their allies, a group known as OPEC+, agreed to ease supply cuts by 400,000 barrels per day (bpd) every month between August and December. The move to cut crude prices for Asia in October would mark the first Saudi price reduction in five months after the OPEC+ agreement.
The group is widely expected to stick with this agreement at its meeting on Wednesday.
Arab Heavy crude’s OSP hit its highest level since 2012, while other grades are at their highest since early 2020. Tight supplies have been supporting Saudi prices.
Referring to August trade, Saudi crude prices are too far from where the spot market is, one respondent said.
Gold Falls Ahead of U.S. Jobs Report
On Thursday morning in Asia, gold was down, slightly moving as investors waited for the latest U.S. jobs report. Their concern remains to be about the Federal Reserve’s asset tapering plan. Moreover, employment data results showed missing expectations.
Also, concerns include interest rate hikes after Chairman Jerome Powell indicated labor market recovery will determine when the central bank begins asset tapering.
The data on Wednesday showed that the ADP nonfarm employment change for August was 374,000, which was below the 613,000 in forecasts. However, the figure indicated a continuous, steady job market recovery.
To be released on Friday are the U.S. jobs report and non-farm payrolls.
By 12:29 AM ET (4:29 AM GMT), gold futures lost 0.13% to $1,813.65. The dollar inched up on Thursday but still near multi-week lows.
Silver was unchanged at $24.17 per ounce, while platinum shed 0.6% and palladium eased 0.2%.
Meanwhile, in other commodity news, world food prices rose in August. This came after two consecutive months of decline. The United Nations food agency on Thursday said prices were pushed up by strong gains for sugar, vegetable oils and some cereals.