Aramco raises light crude pric­ing to Asia amid mar­ket tight­en­ing

Muscat Daily - - BUSINESS -

Dubai, UAE - Saudi Ara­bia, the world’s largest crude ex­porter, raised pric­ing for Septem­ber sales of its light oil grades to Asia in a sign that the mar­ket in the re­gion is tight­en­ing.

State-owned Saudi Ara­bian Oil Co, known as Saudi Aramco, in­creased its of­fi­cial pric­ing for Arab light crude to buy­ers in Asia by 20 cents, to 25 cents a bar­rel less than the re­gional bench­mark, the com­pany said in an emailed state­ment. The in­crease matched the ex­pec­ta­tion in a Bloomberg sur­vey of five re­fin­ers and traders in the re­gion.

Saudi Oil Min­is­ter Khalid al Falih said last week his na­tion would cut ex­ports in Au­gust to try to speed a de­cline in global in­ven­to­ries. The king­dom won’t act alone to bal­ance the mar­ket and other na­tions should im­prove their im­ple­men­ta­tion of sup­ply cuts, he said after meet­ing fel­low pro­duc­ers on July 24 in St Peters­burg, Rus­sia.

OPEC and its part­ners are seek­ing to end an over­sup­ply of crude that trig­gered a drop in prices to less than half of their 2014 peak, when Brent crude fetched US$115.71 a bar­rel. Oil is set to show its first monthly gain of the year in July, with Brent crude re­bound­ing to more than US$50 a bar­rel.

Falih said in May Aramco would ‘markedly’ re­duce its sales to the US to try to re­duce stock­piles there. Pric­ing for most crude grades to North Amer­ica will be raised in Septem­ber, Aramco said in the state­ment.

Aramco widened the dis­count on its heavy crude to Asia by 20 cents, to US$1.95 a bar­rel less than the bench­mark. The spread be­tween Aramco’s heavy and light crudes widened for the first time in six months, in­di­cat­ing the com­pany is seek­ing to make the heav­ier crude rel­a­tively more at­trac­tive to buy­ers in the re­gion. Asian re­fin­ers are gen­er­ally con­fig­ured to process heav­ier crudes.

Aramco raised pric­ing on all crude grades to north­west Europe and the Mediter­ranean re­gion, ac­cord­ing to the state­ment. The com­pany also in­creased all pric­ing for crude to be sold from the Sidi Kerir ter­mi­nal in Egypt, ac­cord­ing to a price list ob­tained by Bloomberg.

Mid­dle Eastern pro­duc­ers com­pete with car­goes from Latin Amer­ica, North Africa and Rus­sia for buy­ers in Asia, its largest mar­ket. Pro­duc­ers in the Gulf re­gion sell mostly un­der long-term con­tracts to re­fin­ers. Most of the Gulf’s state oil com­pa­nies price their crude at a pre­mium or dis­count to a bench­mark. For Asia the bench­mark is the av­er­age of Oman and Dubai oil grades.

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