Saudi Arabia’s surprise announcement that it would cut 1 million barrels per day (bpd) beyond its share of OPEC+ cuts in February and March has refiners in Asia scrambling to secure supplies from Europe, with record purchases of North Sea cargoes in one day.
The surprise cuts by Saudi Arabia following the OPEC+ meeting have provided oil bulls with a major boost, sending Brent above $55.
While the Saudi move has been supporting oil prices all week, the tightening supplies out of the world’s top oil exporter have apparently upended the plans of Asian oil buyers.
Brent topped $55 per barrel at the end of the week, as the pledge from Saudi Arabia to cut deeper has built a solid rally. Other forces are at play as well, including monetary stimulus, the prospects of deeper fiscal stimulus in the USA.
A day later, the Saudis also raised the official selling prices (OSPs) of their oil for Asia for February, lifting the price of the flagship Arab Light grade by $0.70 a barrel to a premium of $1 per barrel against the Middle East benchmark, the Oman/Dubai average.
The major cut and the higher prices from the Kingdom have prompted Asian refiners to source oil from elsewhere, and North Sea cargoes seem to have benefited from the Saudi production cut.
According to Reuters, seven crude oil cargoes from the North Sea were bought and sold during the trading window alone, was a daily record for North Sea cargoes traded in one day in recent history.
Typically, one or two cargoes of 600,000 barrels of crude each are being traded on a normal day in normal circumstances.
Also, ExxonMobil has disclosed emissions data for its Scope 3 emissions – those burned by end-users – for the first time.
Exxon’s sales in 2019 were equivalent to 730 million metric tons of carbon dioxide, roughly the same amount as the entire country of Canada. It is also the highest of all the western oil majors.
Oil Price.com / ABC Flash Point Oil & Gas News 2021.