Saudi formula prices for September-loading crude exports to the Asia-Pacific have tumbled, likely under pressure from extremely weak refining margins, a drop in the underlying Dubai structure and stiff competition from West African and North Sea crudes. Weak refining margins have pushed some Asian refiners to cut runs in August, increasing the uncertainty over demand for crude in the upcoming October-loading Mideast spot market. Before weakening a bit recently, underlying benchmark Dubai crude had surged to its highest level relative to North Sea Brent in nearly four years, sharply increasing the attractiveness of Brent-priced West African and North Sea crudes at the expense of Mideast grades (IOD Jul.21'14).
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