Saudi Arabia Raises Benchmark Crude Oil Price to Asia

Reuters reported that Saudi Arabia has raised its official selling price for benchmark Arab Light to Asia next month in response to increased demand for its crude there and because of higher consumption at home during the hot summer months.

As quoted in the market news:

OPEC’s top exporter, which has been pumping near record levels for the last two months, pushed up its July Asian Arab Light price by 60 cents a barrel versus June to set it at parity with the Oman/Dubai average.

State oil company Saudi Aramco said in a statement that it had cut its selling price to Northwest Europe but kept its sales price to the United States unchanged.

A Reuters survey on Tuesday forecast the Arab Light OSP to Asia would be raised by between 25 cents and 60 cents a barrel.

While a glut is building in the Atlantic basin with sellers of West African and North Sea crude struggling to find buyers, Middle East producers have seen brisk demand over the past month with strong demand from refiners across Asia.

“There are pockets of strength in Asia,” said Seth Kleinman, head of energy research at Citigroup in London. “Light sweet crude in the Atlantic basin is very weak, but Middle Eastern sour grades are stronger.”

Saudi Arabia and its partners in the Organization of the Petroleum Exporting Countries are expected to leave their group production target unchanged when they meet in Vienna on Friday.

The cartel has chosen to focus on building market share rather than defending world oil prices, which are down around 45 percent from the highs seen in the middle of last year.

North Sea Brent crude was trading around $64 a barrel on Thursday, compared with a high above $115 a year ago.

Click here to read the full Reuters report.