The cost of West Texas Intermediate loading for Asian customers in November has decreased by roughly $2 per barrel since September, when the situation peaked, according to unnamed sources with knowledge of the matter. The Israel-Hamas conflict prompted Saudi Arabia to reiterate its support for OPEC+ measures to maintain price stability, which markets saw as a guarantee that the kingdom would increase output in the case of a disruption in the supply chain. This week witnessed the most of the decline.
According to fixture reports and people with knowledge of the issue, buyers in Asia have reserved at least five supertankers since Wednesday amid the price decline. That is almost the same as ten million barrels of oil.
However, the purchases coincide with low inventory levels and the sale of oil by US shale producers, which will begin loading next month. Refineries in North America and Europe are also keen to stockpile as they finish up maintenance and benefit from higher diesel profit margins.
WTI loading in November is available for about $7 more per barrel than Middle East rates in Dubai, a decrease from $9 at the end of the previous month.
According to pricing firm General Index, the difference in price between WTI and Abu Dhabi’s Murban oil, which is now marked at a premium of $4.25 per barrel over the Dubai benchmark, is getting closer. Asian buyers sometimes compare Murban to WTI.
Domestic light sweet pricing to Europe are now around 50 cents per barrel more than ICE Brent prices, up from roughly $2 last week. The costs apply to loads that load in November.