Abu Dhabi National Oil Company (Adnoc) has cut the August retroactive official selling price (OSP) of its benchmark Murban crude, the first time this year that the monthly price has failed to hit a record high.
Adnoc set the August Murban price at $117.50 a barrel, down $19.85 on the month, the state oil company of the world’s fifth-largest oil exporter said in a statement.
The fall came amid steep declines in benchmark international oil prices. US crude ended August at $115.46 a barrel, down over $30 from the July peak.
Still, the Adnoc price cut was steeper than expected by oil traders in Asia, which buy the majority of Abu Dhabi’s crude. Murban was set at a $4.64 premium to the August average for Dubai, which stood at $112.86 a barrel, versus a premium of $6.08 for July.
“That’s a really big step for Adnoc,” said one trader.
The sharp fall comes after Murban failed to attract much interest last month, despite plans for maintenance on the fields that will cut output in October and November.
A plunging profit margin for making gas oil from crude has cut demand for the Abu Dhabi grade, which is rich in kerosene. Lower margins have prompted Asian refiners to start cutting down on the amount of oil they process.
Several cargoes of Abu Dhabi crude for October loading, which typically would have traded by the end of August, were still available. Sellers said the lower OSP could encourage refiners to take the remaining cargoes.
Adnoc also cut the price for Lower Zakum by $19.85 a barrel to $117.40. It cut Umm Shaif by $16.50 to $116.50 a barrel. It set the Upper Zakum OSP at $112.30, at a discount of 56 cents to the August average for Dubai.
(Reuters & Gulf News)