Low demand might force OPEC+ to further lower their pricing

After the world's largest petroleum exporter, Saudi Arabia increased its crude oil prices for three consecutive months, it is widely expected that Saudi Arabia will make the first cut in its Official Sales Prices (OSPs) since the OPEC + group began its record-breaking production cuts, to support the market and prices in the midst of collapsing demand. Oil refiners and traders in Asia are largely assuming that Saudi oil giant Aramco will cut the price of its crude oil, which goes to Asia in September, as the sluggish recovery in oil demand depresses refining margins and weakens oil benchmarks in the Middle East where the producers in the Gulf align their prices for Asia. According to a Reuters poll of five Asian refiners, the industry expects Saudi Arabia to cut the price of its flagship Arab Light crude, which goes to Asia, by an average of $ 0.61 per barrel in September. A Bloomberg survey of eight Asian traders and refiners found similar expectations, with a median drop of $ 0.48 per barrel. That would mean the Saudi Arabian crude oil light shipment for Asia could trade at a premium of $ 0.72 per barrel over the Dubai / Oman benchmark in September, which is below the premium of $ 1.20 per barrel for the Loads would be in August, which Saudi Aramco announced at the beginning of July for the third increase in its crude oil prices in three months. While the Saudi price hikes in the past three months signaled a recovery in oil demand and a strengthening of the reference values ​​for the Middle East Dubai / Oman as supply became tighter after the OPEC + cuts, the expectation of lower Saudi prices in the future is a sign of this that the recovery in demand is stalling and pulling the Middle East benchmarks and refining margins lower.