Saudi Arabia keeps Nov crude to Asia, Europe steady

Saudi Arabia will keep the crude oil supply volume to its Asian and European customers in November steady from October, sources said, ahead of the northern hemisphere winter

and as Libyan oil exports edge back to the market.
The world’s top crude oil exporter will supply full contracted volumes of crude oil in November to at least four Asian term buyers, steady with October, industry sources familiar with the matter said.
Expectations of high demand for heating fuel during winter at the end of the year are likely to keep Asian refineries operating at high rates. European customers said they would receive the same volume in November as October.
“Confirmation (is that) we will receive what we had planned,” one customer said.
On Sunday, Petroleum and Mineral Resources Minister Ali Al-Naimi said the Kingdom saw neither a decline in global oil demand nor a reduction in its exports due to increased output from Libya.
A day before, Al-Naimi said the Kingdom’s oil output was 9.39 million barrels per day (bpd), compared with around 9.8 million bpd in August. Naimi also said Saudi Arabia would remain ready to meet all its customers’ needs.
The steady supply comes as Saudi Arabia raised the official selling price (OSP) for at least two grades to record highs in Asia after a strong trading month for November cargoes.
To manage the high cost of crude, a trader with an Asian refiner said it might try to cut back on Saudi supply by requesting for a lower tolerance level.
“We try to survive with slim margins,” he said.
Other refiners said they were keeping a close watch on whether the strong margins would hold and may decide on the tolerance level later.
Saudi Arabia made no changes to the operational tolerance in the supply allocation, the sources added, meaning buyers have the option of asking for cargoes to be loaded with up to 10 percent more or less crude than contracted.
Impact on the crude market from an outage at Shell’s largest refinery by capacity in Singapore has been limited so far as it canceled just 4 million barrels of October-loading crude supply from Saudi Aramco.
India’s Reliance Industries has soaked up some of these barrels by buying an extra 600,000 barrels of crude from Saudi Aramco for October, a move that may help the refiner cut oil processing costs.
Shell’s shutdown has caused refining margins to surge, driving up the cost of transport and heating fuel to buyers from China to Indonesia as they scramble to secure alternative supplies.
Yet, these gains may be brief as Shell has been quick to restart one of the crude distillation units on Monday.
Source: Reuters