Kuwait cuts December OSPs, KEC follows Arab Medium

Quantum Commodity Intelligence - Kuwait has reduced its Official Selling Prices (OSPs) for crude loading in December, the company announced in a document sent to customers Monday, cutting differentials for sour crude after the market structure narrowed last month.

KPC sets its flagship December Kuwait Export Crude (KEC) at $3.20/b over the average of Platts Dubai/DME Oman quotes, compared to $4/b for November.

Kuwait Super Light Crude (KSLC) OSP was set at $6.55/b over Dubai/Oman quotes, up $0.10/b from November-loading barrels.

The OSPs were largely in line with expectations after Saudi Arabia reduced differentials, including Arab Medium to +$3.20/b from +$4/b as sluggish fuel oil cracks weighed on heavier barrels. Flagship Arab Light was cut to Platts Dubai/DME Oman +$5.45/b for loading next month versus +$5.85/b for November cargoes.

In line with most Middle East crude, Kuwait grades are sold two months forward, but priced against assessments published in the month of loading, so they include two months of market structure.

The key M1/M3 Dubai cash spread, closely monitored by KPC and other Middle East National Oil Companies (NOCs), averaged $4.75/b in October compared to $5.35/b in September, according to Quantum data.

So far in November, the M1/M3 (Jan23/Mar23) Dubai spread has averaged +$3.95/b but was assessed by Quantum on Monday at a six-month low of +$3.25/b, indicating further reductions in OSPs for January.

Meanwhile, NIOC set the OSP on Iranian Light crude for Asia at $5.35/b over the Platts Oman/Dubai average for December, versus $5.65/b in November, largely following other producers.