Saudis Cut Asia Light Oil Pricing for First Time in Eight Months
(Bloomberg) -- Saudi Arabia cut pricing for Arab Light crude to Asia for the first time in eight months, a sign that the world’s largest oil exporter is fighting harder for sales in its biggest market.
State-owned Saudi Arabian Oil Co. lowered its official selling price for Arab Light crude for April shipment by 55 cents to $1.10 a barrel more than the Middle East benchmark, the company said Monday in an emailed statement. It’s the first cut since August. Aramco had raised its January pricing to the highest since 2014 and kept it there for the next two months. The producer, known as Saudi Aramco, was expected to lower pricing by 45 cents a barrel, according to a Bloomberg survey.
Oil demand usually slows in the first several months of the year as refineries do maintenance work on plants. Demand for gasoline and other transport fuels usually rises during the summer driving season in North America. Oil prices have advanced since the Organization of Petroleum Exporting Countries and allied producers began cutting output in January 2017 in an effort to drain a global glut.
Aramco also cut pricing to Northwest Europe and the Mediterranean region and lowered Light and Extra Light grades to the U.S.
Middle Eastern producers compete with cargoes from Latin America, North Africa and Russia for buyers in Asia, its largest market. Producers in the Persian Gulf region sell mostly under long-term contracts to refiners. Most of the Gulf’s state oil companies price their crude at a premium or discount to a benchmark. For Asia, the benchmark is the average of Oman and Dubai oil grades.
With assistance from Sharon Cho and Serene Cheong. To contact the reporter on this story: Anthony DiPaola in Dubai at email@example.com. To contact the editors responsible for this story: Nayla Razzouk at firstname.lastname@example.org Bruce Stanley, Anthony DiPaola.
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