ADNOC unveils its Awards for September

ADNOC, or the Abu Dhabi National Oil Company, has released its official September sales prices. These were judged to be largely in line with market expectations.

ADNOC unveils lower prices

The producer has set the official September selling price with the ICE Futures Abu Dhabi. IFAD produces the Emirates’ flagship crude oil, Murban.

In September, this Murban will sell for $105.96 a barrel, down $11.57 from August. At ADNOC, the price of other crude oil varieties is indexed to the price of Murban.

Thus, Umm Lulu was priced 10 cents per barrel higher than Murban. This represents a drop of 5 cents per barrel from the August price.

For its part, Das Blend was priced at 80 cents per barrel lower than Murban, compared to minus 60 cents per barrel last month.

Finally, the price of Upper Zakum was set for September at $3 per barrel less than Murban. It is the only one whose differential is up 20 cents per barrel since August.

Variable qualities

The reason Upper Zakum is so cheap is that it is more sour than other grades of oil. For example, the spread between Murban and Upper Zakum averaged $3.14 per barrel according to ADNOC.

However, it was mixed reviews of other oil grades – notably Das Blend and Umm Lulu – that participated in the revival of Upper Zakum, which saw its prices rise on the back of demand.

More generally, crude oil prices are starting to fall and the Murban should be no exception. In addition, ADNOC’s Murban is seeing increasing competition from the American WTI Midland. However, the drop in the price of Murban could prove lucrative for ADNOC.

Thus, buyers could also turn to other grades whose price is linked to that of Murban.