Crude prices to rise

SINGAPORE. — Top oil exporter Saudi Arabia is expected to raise prices for all grades of crude it sells to Asia in February, tracking strength in the Dubai price benchmark and robust refining margins, traders said yesterday.

The official selling price (OSP) for flagship Arab Light crude could rise by at least 50 cents a barrel for February, a Reuters survey of four traders showed.

The respondents expect bigger price hikes for heavier grades in February, pushed up by the strongest fuel oil cracks in five years.

Arab Heavy’s OSP could rise by as much as 90 cents to $1 a barrel in February, traders said.

The price hikes are “expected given stronger Dubai structure and stronger margins,” one of the traders said.

He added that the contango spread between the first- and third-month Dubai crude prices published by price reporting agency Platts in December narrowed by 55 cents to 60 cents a barrel from November, an indication of a stronger spot market. The price of oil for prompt delivery is lower than those for future months in a contango market.

Saudi Arabia had committed to cut its production in January by 486,000 barrels per day (bpd) to 10.058 million bpd in an agreement among members of the Organisation of the Petroleum Exporting Countries. — Reuters.