Middle East Crude-Benchmarks rise after Saudi Arabia pledges extra cut

Middle East crude benchmarks Oman and Dubai on Wednesday rose to their highest levels since Dec. 18

  

SINGAPORE- Middle East crude benchmarks Oman and Dubai on Wednesday rose to their highest levels since Dec. 18 after Saudi Arabia pledged additional, voluntary oil output cuts of one million barrels per day (bpd) in February and March.

Saudi is going beyond its promised cuts, while most OPEC+ producers will hold production steady in the face of new coronavirus lockdowns. 

Two members - Russia and Kazakhstan - will be allowed to bump up their output by a modest combined 75,000 bpd in February and a further 75,000 bpd in March.

On Wednesday, traders were still waiting for Saudi Arabia to issue its fresh official selling prices (OSPs) for February, which are forecasted to rise from the January levels.

The additional Saudi oil supply cut will likely keep the spot market supported this month, trading sources said.

Indian Oil Corp (IOC), the country's top refiner, has loaded its first cargo of Iraq's new Basra Medium crude grade which was introduced this year, according to ship tracking data from Refinitiv Eikon and a source with knowledge of the matter. 

ASIA-PACIFIC CRUDE:

Three cargoes of Australia's North West Shelf (NWS) condensate are scheduled to load in March, unchanged from the previous month, a preliminary loading programme showed. Seller Grade Volume Loading date BP NWS cond 650KB March 5-9 Chevron NWS cond 650KB March 15-19 BHP NWS cond 650KB March 24-28

Indonesia's Pertamina is seeking condensate for delivery over Feb. 20-28 via a tender to be closed on Thursday.

NEWS

Traders have accelerated crude oil sales from floating storage in December to meet higher demand in Asia as the region's refineries throttled up for peak winter consumption, trade sources and analysts said. 

Saudi Arabia's pledge to cut its oil output by more than required under its pact with other OPEC+ producers points to weakening oil demand following new COVID-19 lockdowns and sets the stage for a tighter market in the second quarter, Goldman Sachs said in a note released on Tuesday. 

A South Korean delegation is heading to Iran on Wednesday to seek the release of a chemicals tanker and its 20-member crew seized in Gulf waters by Iranian forces, Yonhap news agency reported. 

A consortium including Hyundai Engineering Co Ltd and KBR Inc has expressed interest in a contract to renovate Ecuador's 110,000-barrel per day (bpd) Esmeraldas refinery, Energy Minister Rene Ortiz and the companies said on Tuesday. 

(Reporting By Shu Zhang; Editing by Shailesh Kuber) ((shu.zhang@thomsonreuters.com; +65-6870-3549; Reuters Messaging: Twitter @shuzhang4))


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