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UPDATE 4-Saudi Aramco trading arm wants refined products after attacks -sources


Reuters Riyadh
Updated: 17-09-2019 10:55 IST
UPDATE 4-Saudi Aramco trading arm wants refined products after attacks -sources

Image Credit: Reuters

Saudi Aramco's trading arm is looking for oil products for prompt delivery after Saturday's attacks on Saudi oil facilities, several trade sources said this week. Saudi Arabia is set to become a significant buyer of refined products after the attacks forced it to shut down more than half of its crude oil output and some of its gas, consultancy Energy Aspects said in a note on Sunday.

The attacks may have curtailed as much as 1 million barrels per day (bpd) of Aramco's refining capacity, Energy Aspects said, although this could not be confirmed and it was not clear to which Saudi Aramco refineries it was referring. Aramco Trading Company (ATC), the trading arm of Saudi Aramco, is making inquiries to buy diesel for the prompt delivery, two of the trade sources said.

Saudi Arabia is typically a net exporter of diesel. "They are looking (for oil products) since they are trimming runs at some of the refineries," one source said, declining to be named as he was not authorized to speak to media.

He said the total volumes sought by Saudi Arabia were not immediately clear, but that the prompt derivatives market was trading higher on Monday. ATC is seeking 10 parts-per-million (ppm) sulphur diesel through private discussions, asking for "anything prompt," a second trader said.

It is also seeking 500ppm sulphur gasoil for delivery into the Arabian Gulf, most likely for domestic use, said a third source, in the refining industry. Brent crude futures, the international benchmark, rose by as much as 19.5% to $71.95 per barrel during early Asian trading hours.

A fourth trading source said Aramco Trading may have bought two ultra-low sulphur diesel cargoes from India and the Middle East, although this could not be confirmed immediately and further details were not available. "The issue for Aramco is how they can meet their huge commitments to deliver products in September and October," another diesel trader said. The trader, who is expecting a delivery of a Saudi diesel cargo at the end of the month, said they have not yet heard any notifications of changes from Aramco.

An ATC official declined to comment on the matter. "Tightness in ultra-low-sulfur diesel will be magnified especially since the new Saudi export refineries produce 40 to 45% low sulfur diesel," Gary Ross, founder of Black Gold Investors, told Reuters.

Also Read: Drones hit two Saudi Aramco oil facilities: state media

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

COUNTRY : Saudi Arabia