Top oil exporter Saudi Arabia may implement deep price cuts for the crude it sells to Asia in February after Middle East benchmarks and spot prices slumped this month, industry sources said.
The producer is expected to cut official selling prices (OSPs) of all grades by more than $1 in February from the previous month, dropping prices back to their lowest levels in three to four months, a Reuters survey of seven crude buyers showed.
"The Dubai market structure is weaker and distillates cracks improved, which makes valuation for Arab Medium and Arab Heavy worse than light grades," one respondent said.
For Arab Heavy's OSP, all except one respondent expected price cuts of more than $1. Strong margins for low-sulphur fuel oil, which has hit the highest since February 2020, may support the price of the heavy crude, said the respondent who had forecast a 55-cent reduction.
