Qatar cuts January OSPs, February Al Shaheen set for sharp fall

Quantum Commodity Intelligence - Qatar is the latest National Oil Company (NOC) to reduce Official Selling Prices (OSPs) for Asian refiners, largely following the direction of Saudi OSPs released last week.

QatarEnergy set its Qatar Marine grade for January at a premium of $1.85/b over Platts Dubai/Oman, down from $4/b on December barrels, while lighter Qatar Land was set at +$4.60/b versus +$4.80/b for December.

The OSPs were largely in line with expectations after Saudi Arabia reduced its prices to Asia, while the weaker Dubai crude structure last month facilitated the lower premiums.

Asian OSPs, which include two months of market structure, narrowed as the key M1/M3 Dubai cash spread averaged $2.81/b in November compared to $4.75/b in October, according to Quantum data.

Saudi Arabia cut its flagship Arab Light grade to Platts Dubai/DME Oman +$3.25/b for loading next month versus +$5.45/b for December cargoes, while Medium was reduced to +$2.10/b from +$3.20/b.

So far in December, the M1/M3 Dubai cash spread has averaged $1.13/b, the lowest of the year and flagging further OSP cuts for February.   

Qatar Marine is a medium sour crude (API 32.6, sulfur 1.84%), while Qatar Land is a light-medium crude (API 41, sulfur 1.22%).

Al Shaheen

Meanwhile, the state-owned producer is expected to offer its keenly-watched Al Shaheen tender this week. Premiums are expected to be sharply lower than last month's award at Dubai $2.50-$2.80/b for January barrels, according to traders.

Market watchers said Al Shaheen could sell for around $1/b over Dubai, the lowest spot premium in around 20 months.

Like most Middle East crude, Al Shaheen is sold two months forward, but prices against assessments are published in the month of loading, so it includes two months of market structure.

The M1/M3 (Feb23/Apr23) Dubai was assessed by Quantum on Friday at +$1/b, which traders said will likely be indicative for February-loading Al Shaheen buying interest.

Traders and NOCs closely watch the Al Shaheen tender as it is one of the component grades delivered against the Dubai benchmark, along with Oman, Dubai, Upper Zakum and Murban.

Dubai cash for February delivery was assessed by Quantum at $72.05/b for 9 December (1630 Singapore time), the lowest price of the year.