Russell: Saudi Arabia's Oil Price Hike To Asia May Be Self-Harming
The average price of Saudi imports was higher, at $388.52 a tonne, as was those from fellow output cutters Russia, at $390.09.
In contrast, supplies from Brazil were below the Chinese average at $363.25 a tonne, as were those from the United States at $368.20.
Of course, this is a bit of an apples and pears comparison, given the Chinese customs data doesn't break down imports by grade, with lighter crudes tending to fetch a premium over heavier types.
But there has also been movement in the relative pricing since December, the month before the output cuts agreements took effect.
In December the average price of Saudi crude was 2.4 percent below the overall average paid by China, by April it was at a premium of 2.3 percent.
Brazil's crude was at a discount of 2.3 percent to the Chinese average in December, and this had widened to 4.4 percent by April.
In other words, not only is Saudi Arabia losing market share in China, it's crude is now more expensive relative to those from some competitors outside the OPEC and allies agreement.
The Chinese numbers neatly encapsulate the Saudi dilemma of how much can they tighten supplies and raise prices before the effect on their market share becomes too pronounced?
(Editing by Richard Pullin)
View Full Article
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.