Saudis increase price of crude on signs of rising demand
Saudi Arabia raised pricing for August oil shipments to Asia, the u.s. and northern europe amid signs oil demand is recovering from its Covid-triggered collapse.
The world’s biggest crude exporter is increasing rates as it pushes other major producers to keep cutting supply to rebalance the market.
State producer Saudi Aramco lifted the official selling price for its flagship Arab Light crude to buyers in Asia, its biggest market, for a third-consecutive month, though by less than expected. Aramco raised pricing to the u.s., where it’s also reining in shipments, for a fourth month.
“The increase in prices reflects the overall recovery in oil markets,” said Carole Nakhle, chief executive of London-based consultant Crystol energy. “demand growth remains uneven and may even be subject to temporary reversals, but it is unlikely to fall off a cliff because lockdowns, if reintroduced, are likely to be more localized.”
Arab Light crude to Asia rises to us$1.20 a barrel above the Middle east benchmark, compared with a 20-cent premium for July, the firm said in a statement.
Traders and refiners, who are struggling with low margins, expected the premium to climb to us$1.45, according to a Bloomberg survey.
Aramco raised u.s. pricing by between 20 cents and 40 cents a barrel. Light crude will sell at a premium of us$1.65 a barrel, up by 30 cents, the company said. It also increased prices for most grades sold to northwestern europe.