Sept Saudi crude price to Asia may hit record

SINGAPORE, July 28 (Reuters): Top oil exporter Saudi Arabia could raise September crude prices for customers in Asia for a third month even though refining margins have declined as high fuel prices and persistent COVID-19 restrictions in China hit demand.

State oil giant Saudi Aramco could hike the official selling price (OSP) for its flagship Arab Light crude by between 70 cents and $1 a barrel from the previous month, according to six refining sources surveyed by Reuters.

The increase would shoot the September price to a record level, surpassing the previous record of $9.35 a barrel above the Oman/Dubai average set for May.

Saudi typically sets the prices based on the monthly change in benchmark Dubai's market structure, which reflects the first- and third-month price spread.

In July, supply tightness pushed front-month prices about $1.70 a barrel higher than those traded in the future month.

"But we think they won't hike the OSPs as much," said one respondent.

Profit margins at Asian refiners who process Dubai crude have plunged by as much as 97 per cent over a month, with gasoline cracks even falling into negative territory last week.