Saudi Arabia Raises Crude Oil Prices To Asia
On the back of a stronger Dubai benchmark and solid demand in Asia, Saudi Arabia has raised the official selling prices (OSPs) of all its crude grades to Asia for January, generally in line with traders’ expectations.
OPEC’s largest producer and exporter has lifted the price of its flagship Arab Light crude grade for Asian buyers by $0.40 a barrel for January compared to December, to a premium of $1.65 per barrel over the Dubai/Oman benchmark against which the Saudis price their oil to Asia, a source with knowledge of the pricing told Reuters on Tuesday.
The $1.65 Arab Light premium to Dubai/Oman is the highest in more than three years, since September 2014, according to Reuters data.
Saudis have raised the OSP for all their crude grades bound for Asia next month, Reuters’ source said.
A Reuters survey showed last week that traders expected Saudi Arabia to lift the OSP for all its grades for Asia, with the lighter grades getting higher price hikes, and smaller increases for the heavier grades. The OSP of Arab Extra Light was expected to be raised by $0.50-0.60 to a $2.95-$3.05 premium over Dubai/Oman. The Arab Light pricing reported today was at the upper end of the expectations of survey respondents.
Arab Medium and Arab Heavy were expected to see smaller increases in OSP, and one of the four survey respondents expected a price cut for Arab Heavy.
In Platts’ survey, the expectations were similar, with traders expecting increases for the lighter grades on strengthened Dubai oil market structure in November due to robust demand in Northeast Asia and OPEC’s continued cuts. However, some traders thought the OSP differentials for some medium and heavy grades from the Middle East may not be raised because of weak fuel oil margins and pricing competition from similar grades from other regions.
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Source / More: By Tsvetana Paraskova for Oilprice.com
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