SINGAPORE: The Middle East crude market kicked off trade this month on a strong note, with both benchmarks topping $1 a barrel against Dubai swaps as Saudi Aramco may raise prices soon.
OSP: Saudi Arabia is expected to raise prices for all grades of crude oil it sells to Asia for June to track a rebound in Middle East benchmark Dubai prices last month, traders said.
The producer could raise June prices by as much as $1 a barrel after the cash Dubai price spread between the first and third month widened in backwardation by the same amount last month, one of the five respondents in a Reuters survey said.
"It looks like it's going to be a jump (based on calculations) but I hope Saudi can be reasonable as they didn't cut as much as what the calculated prices should be last month," an Asian crude oil buyer said.
"Either way, the flat price is up and producers should be happy now."
Still, some respondents expect state oil giant Saudi Aramco to moderate its price hikes after it unexpectedly raised the May Arab Light OSP last month.
Three respondents said the June OSP for flagship Arab Light may rise by 50-60 cents to hit the highest since August 2014.
The last respondent expects Saudi Aramco to adjust prices this month by keeping Arab Light's OSP unchanged.
UAE: Abu Dhabi National Oil Company (ADNOC) has informed its customers of cuts in crude oil allocations for June, in line with the OPEC supply reduction deal, an industry source familiar with the matter said on Sunday.
In June, all crude grades - Murban, Das and Upper Zakum - will be reduced by 5 percent, the source said.
WINDOW: Cash Dubai's premium to swaps rose to $1.07 a barrel, the highest since August 2015.
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