REUTERS
Saudi Arabia is expected to cut the prices of crude it sells to Asia in November after the Dubai benchmark weakened last month, according to Reuters.
However, prices, are likely to be lowered less than what is indicated by a formula, given the top oil exporter tempered gains last month despite a strong rise in the Dubai price - which is used as a benchmark to set Middle East crude prices in Asia, the traders said on Thursday, Reuters reports.
"Their prices are quite competitive so they don't have to cut as much," a Singapore-based trader said.
Saudi Aramco typically adjusts prices based on the monthly changes in the price spread between first- and third-month physical Dubai and oil product yields for each grade.
Read alsoSaudi Arabia demands Russia end Syria raids: ReutersA wider Dubai contango market structure suggests a drop of more than $2 a barrel for most of the Saudi grades in November, a survey of five refiners and traders by Reuters showed, but most respondents expect a cut of $1.50-$2 in the official selling prices (OSPs).
Lower prices could draw more Saudi crude to Asia, with an end to the peak demand season and refinery maintenance at Rabigh freeing up more oil for exports.
Read alsoSaudi Arabia withdraws overseas fundsSaudi Arabia is also expected to cut prices of medium and heavy grades by a larger extent than the light ones, widening the light-heavy crude spread, traders said.