Saudi oil cuts see top buyers looking at alternatives

economictimes.indiatimes.com:

Saudi Arabia and Russia's latest pledged output cuts deprive them of barrels. The two producer countries said on Monday that they will prolong and deepen output cuts into August. Along with reductions they already made, and ongoing curbs by other nations in the OPEC+ alliance, total supply curtailments will amount on paper at least to 3.1 million barrels a day, or about 3% of global consumption.Traders in Asia said there's a plentiful supply of barrels from producers outside of the 23-nation alliance particularly in locations like the US, West Africa and the North Sea that they will turn to if the region does bear the brunt of the latest cuts.

Any influx into Asia of oil from the Atlantic Basin could be a mixed blessing for Middle East producers. On the one hand, it could help to drain supplies in the US and Europe, home to the world's most traded oil futures contracts. On the other, it could mean losing a share of the fastest growing demand market.

So far, the production jolts by Saudi Arabia and its allies have failed to make any meaningful difference to headline oil prices, which have been stuck at between $70 and $80 a barrel for weeks. That said, prices for grades that are similar to those that the kingdom pumps have rallied more strongly, catapulting them above Brent last week. In the next few days, Saudi Arabia will publish official selling prices for its crude for different buying regions around the world.

Those numbers, often mirrored closely by other Saudi Arabia's neighboring producers, can be pivotal in defining demand from different regions. They are normally released by the 5th of each month. Before the latest Saudi cuts, traders estimated that prices for August-loading cargoes from Saudi Arabia would be