Energy & precious metals - weekly review and outlook
Investing.com — It's OPEC+ week ahead and we can expect the drone on how much higher crude prices can go to continue all week.
After a near 30% gain in the third quarter, it’s not surprising that the greed side of the market wants more.
The enablers of that on the production side of OPEC+ — Saudi Arabia and Russia — are, however, facing some challenges in growing the rally.
Already, India’s imports of Saudi oil in September are set to come in at below 500,000 barrels per day — the lowest monthly level in almost a decade — as global crude benchmark Brent peaked at nearly $98 from a March low of just above $70.
Also, the Saudis might have to ease production cuts in October — instead of adding to them — due to contractual obligations. Crude shipments from Saudi ports likely rose between 300,000 and 400,000 barrels per day last month from August — despite their so-called “lollypop cut” of one million barrels per day — and the trend might continue, OilPrice.com noted in a roundup of market intelligence gathered from various sources.
The Saudis have also been quite restrained in adding to the Official Selling Price, or OSP, of their crude despite Brent’s runaway rally, that market roundup showed. Saudi Arabia’s medium sour crude grades were hiked by $0.10 per barrel each, moving Arab Light to a $3.60 per barrel premium vs Oman/Dubai. The only Saudi crude grade that saw a notable increase in October was Arab Super Light, a very rare condensate-like grade that sees 1-2 cargoes per month, which rose by $0.50 per barrel.
“In an environment like this, Saudi Arabia’s national oil company Saudi Aramco (TADAWUL:2222) was expected to hike Asian prices by a solid margin,” the OilPrice roundup said. “Surprisingly, the anticipated OSP
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