Saudi Arabia, the leading oil exporter, is likely to reduce prices for most of its crude grades sold to Asia in December, reflecting a decline in the Middle East benchmark Dubai, according to trade sources.

Such price reductions would indicate weak demand and could provide further justification for the Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia, along with its allies including Russia, to postpone plans for increasing production starting in December.

A Reuters survey of six refining sources suggests that the official selling price (OSP) for the prominent Arab Light crude may decrease by 30 to 50 cents per barrel in December compared to the previous month, aligning with a similar decline in Dubai price spreads observed last month.

Spot premiums for Middle Eastern crude saw a decline last month as the Asian market remained well-supplied, while demand from major buyers like China was tepid, despite an improvement in refining margins.

However, some respondents anticipate smaller price reductions for heavier grades of Saudi crude, such as Arab Medium and Arab Heavy, in December due to robust margins for high-sulphur fuel oil.

In Singapore, a key indicator for the region, complex refining margins rebounded to over $4 per barrel in the latter half of October, a significant increase from September's average of $2.12, which was the lowest this year.

OPEC+ may consider postponing the planned increase in oil production for December by a month or longer, as reported by four sources familiar with the situation, citing concerns over weak oil demand and rising supply.

A decision regarding this delay could be made as soon as next week, according to two of the sources. Saudi crude OSPs are typically announced around the fifth of each month, setting the pricing trend for Iranian, Kuwaiti, and Iraqi crude, which impacts approximately 9 million barrels per day (bpd) destined for Asia.

Saudi Aramco, the leading oil company in the kingdom, determines its crude oil prices by taking into account customer recommendations and assessing the fluctuations in oil value over the preceding month, which includes evaluating yields and product prices.

As a standard practice, officials from Saudi Aramco refrain from commenting on the monthly Official Selling Prices (OSPs) set by the kingdom.

The anticipated Saudi prices for December, expressed in $/bbl relative to the Oman/Dubai average, are as follows:

NOV Change est.DEC OSP

Arab Extra Light +2.00 -0.50/-0.27 +1.50/+1.73

Arab Light +2.20 -0.50/-0.30 +1.70/+1.90

Arab Medium +1.35 -0.40/+0.00 +0.95/+1.35

Arab Heavy +0.20 -0.40/+0.00 -0.20/+0.20.