An industry survey showed Saudi Arabia’s crude oil inventories reached 78 million barrels as of September 23, the highest since April 26 when oil demand fell to a low point amid the height of efforts to contain the coronavirus pandemic. According to market participants, Asian refiners, the main buyers of Saudi crude, are struggling to keep up with term commitments amid “terrible” margins due to weak demand and higher selling prices from the supplier.
Analysts said that, on average, Asian refiners have 75% and 80% term commitments, which are higher than their current run rates. These refiners are currently weighing on whether to maintain commitments to purchase oil from Saudi Arabia amid squeezed margins. Maintenance at the Ras Tanura refinery also partially contributed to the increase in the kingdom’s oil stocks.
