SINGAPORE  - Top oil exporter Saudi Arabia is expected to raise its official selling prices (OSPs) for light crude grades for Asia in April, tracking stronger Middle East benchmarks and refining margins, a Reuters survey showed on Tuesday.

Sources at five Asian refiners expect the April OSP for flagship Arab Light crude to increase by an average of 16 cents a barrel, which would take it to the highest level since August last year. Their forecasts ranged from increases of 5 cents to 30 cents, in line with gains in benchmarks DME Oman and cash Dubai's premiums to Dubai swaps.

Asia's refining margins also improved in February, with product prices supported by refining output disruptions in Texas in the United States and Asia's upcoming peak refinery maintenance period in second quarter. 

Saudi Arabia voluntarily cut an extra 1 million barrels per day of production in February and March under a deal among the Organization of Petroleum Exporting Countries and their allies to support prices.

The group known as OPEC+ will meet on Thursday to decide whether to ease supply cuts from April.  

However, two of the five survey respondents expected Saudi Aramco to maintain or cut April OSPs for the heavier Arab Medium and Arab Heavy grades, after similar grades like Upper Zakum traded at a discount in the spot market last month.

"Medium and sour grades performed poorly," said a source with a Chinese refiner. "Many trades were done in discounts, so we think they should cut the OSPs."

Saudi crude OSPs are usually released around the fifth of each month and set the trend for Iranian, Kuwaiti and Iraqi prices, affecting more than 12 million barrels per day (bpd) of crude bound for Asia.

State oil giant Saudi Aramco sets its crude prices based on recommendations from customers and after calculating the change in the value of its oil over the past month, based on yields and product prices.

Saudi Aramco officials as a matter of policy do not comment on the kingdom's monthly OSPs.

 

Below are expected Saudi prices for April (in $/bbl against the Oman/Dubai average):

MARCH Change est.APRIL OSP

Arab Extra Light +0.60 +0.10/+0.50 +0.70/+1.10

Arab Light +1.00 +0.05/+0.30 +1.05/+1.30

Arab Medium +0.75 +0.00/+0.05 +0.75/+0.80

Arab Heavy +0.30 -0.10/+0.10 +0.20/+0.40

Source: Reuters, trade

(Reporting By Shu Zhang Editing by Florence Tan, Kirsten Donovan) ((shu.zhang@thomsonreuters.com; +65-6870-3549; Reuters Messaging: Twitter @shuzhang4))