Aramco expected to cut contract prices for August
Prices to be reduced by $35/mt on the back of crude prices falling below $55 a barrel
Saudi Aramco is expected to reduce its August contract price for both propane and butane, Platts, independent energy news portal, reported.
Prices will be reduced by as much as $35/mt on the back of crude prices falling below $55 a barrel, surplus in the Middle East and relatively high freight costs, industry sources told Platts.
Aramco is expected to release its August contract prices this week. Propane prices in August are expected to be $350-$370/mt, while butane will be sold at $380-$400/mt, sources said.
The spread between propane and butane is seen as holding steady at $30-$35/mt, sources added.
On Monday afternoon, propane August CP swaps were pegged at $360.25/mt, and butane remained at a $34/mt premium to propane, Platts reported.
It added that focus has shifted to September deliveries into North Asia as second-half August CFR North Asia was viewed as balanced.
"The delivered market for August appears balanced," Brokerage Lorentzen and Stemoco was quoted as saying in its weekly report.
"Even with fairly high stocks in Japan and Korea, supplies appear to be snapped up, perhaps as a reflection of fewer incoming US spot cargoes due to high freight rates and the closing of the [US-to-Asia] arbitrage."