Adnoc's move to set the price at the lowest premium may fuel a price war
Adnoc sells Murban crude at lowest premium in at least a decade
SINGAPORE, January 6, 2015
Abu Dhabi National Oil Company (Adnoc) has set the December price for flagship Murban crude at the lowest premium against Dubai quotes in at least a decade, a move that may fuel a price war among oil producers in Asia.
In a surprise move, the Opec producer cut Murban's premium to Dubai for December.
"It's priced to clear! That's all I can figure," an oil analyst who declined to be named due to company policy said.
Traders had expected Adnoc to raise Murban's OSP differential to Dubai after the grade traded at 30-40 cents premiums against its OSP in the spot market last month.
Adnoc set the December retroactive selling price for its benchmark Murban crude at $60.65 per barrel, the lowest since May 2009, the company said. This puts the December Murban OSP's premium to Dubai at 41 cents, down 27 cents from the previous month.
The UAE price cuts came a day after Saudi Arabia raised prices for all grades it sells to Asia.
Members of the Organization of Petroleum Exporting Countries (Opec) decided at a November meeting to maintain output, a move aimed at protecting their market share against non-Opec producers. Fellow Opec producers Kuwait and Iraq have also been aggressive when setting monthly prices.
The decision fuelled worries of a global supply cut and partly caused prices to sink to fresh 5-1/2-year lows.--Reuters
