Middle East

Saudi Arabia's state-owned Saudi Aramco informed its term buyers in Asia that it set the July OSP formula for its flagship Arab Light (AL) OSP at a premium of $1.90 to Dubai/Oman average, up 20cts from the previous month. Crack spreads for middle distillates in Asia tracked a firm trend, but backwardation in the benchmark Dubai papers narrowed slightly, so that Saudi Aramco apparently curbed the OSP hike to 20cts. For the OSP, an end-user in Northeast Asia said that the OSP came largely within market expectations.

Africa/Europe/Russia/America

In the trade of August-loading Sakhalin grades, India's Oil and Natural Gas Corp (ONGC) issued a Sokol sell tender for August-loading. It offered one cargo for August 2-8 loading. A total of 10 cargoes for Sokol would be loaded in August and two cargoes, out of the 10 cargoes were allocated to ONGC. Some market players expected the August-loading Sokol market to be supported by potentially firm demand from main end-users such as South Korea on top of healthy US demand. In addition, the wide EFS spreads would enhance the competitiveness for Dubai linked Sokol, relative to Dated Brent linked grades.

Asia Pacific

Spot differentials for July-loading Australian Pyrenees narrowed to premiums of $9.20-9.30 to DTD Brent. Crack spreads for low sulfur fuel oil worsened in Asia, which weighed on the Pyrenees market. Crack spreads for low sulfur fuel oil in Asia was at $9.69 to Dubai quotes as of Thursday, narrowing by nearly $2.00 from the same period the previous month. Australia's BHP sold 550,000bbl of Pyrenees for Jul 22-26 loading in its sell tender closed on Thursday. The price was believed to be at a premium of $9.00 to close to mid-$9s to DTD Brent.