Saudi Aramco cuts OSPs for Asia 10-30 cts/b, Arab Light down 10 cts/b

London (Quantum Commodity Intelligence) - Saudi Aramco has reduced Official Selling Prices (OSPs) for June crude oil sold to Asia and Europe, but increased differentials for the US, according to a document circulated to customers Wednesday.

For Aramco's key customer base in Asia, differentials for the flagship Arab Light grade was reduced by $0.10/barrel to +$1.70/b, while Arab Medium was cut by $0.20/b to +$1.25/b.

The reductions for Asia had been expected due to the fall-off in demand from India, and the weaker market structure as June/July backwardation eroded last week. Some traders had called for a larger reduction, but firmer refining margins led to a more modest cut.

Saudi Aramco's sales to Asia are priced as a differential to Platts Dubai/DME Oman, with each benchmark given equal weighting in the formula.

Sales to Europe, priced against ICE Brent futures, were also slightly reduced.

Arab Light to the Mediterranean was reduced by $0.20/b to -$2.30/b versus Brent, while Arab Light to Northwest Europe was also cut by $0.50/b to -$2.90/b against Brent.

Arab Light and Medium for the US were both increased by $0.20/b against the U.S. Gulf Argus ASCI price to +$1.05/b and +$0.35/b, respectively.