FILE PHOTO: A 3D-printed oil pump jack is seen in front of displayed OPEC logo in this illustration picture. REUTERS/Dado Ruvic
RIYADH: Saudi Arabia raised the price of its flagship crude to Asia for the first time in three months, a sign that the kingdom remains confident about demand in the world’s largest importer.State-owned Saudi Aramco raised the September official selling price of Arab Light crude for customers in Asia by 20 US cents to US$2 a barrel above the regional Oman-Dubai benchmark, according to a price list seen by Bloomberg.
Still, it was less than the increase of 50 US cents forecast in a Bloomberg survey of five traders and refiners.
According to traders involved in the survey, oil demand appears healthy for next month in Asia as refineries come back from maintenance, and China’s consumption typically peaks in September and October.
The traders also anticipated an increase due to recent movements in Asian oil prices.
The increase comes days after the Organisation of the Petroleum Exporting Countries and its allies (Opec+) signalled no changes to oil supplies and stuck with tentative plans to start reviving halted production next quarter.
Middle East crude is also looking more attractive to Asian buyers compared with expensive grades from the Atlantic basin.
Chinese, Thai and South Korean companies recently boosted their purchases of Abu Dhabi’s Murban crude.
Still, there’s some concern over a possible supply surplus starting later this year if the Opec+ countries, including Saudi Arabia, go through with their plan to begin unwinding some of their voluntary cuts.
About 540,000 barrels a day are due to be added over the course of the fourth quarter.
This, when combined with ample supplies from the United States, Guyana, Brazil and a faltering economic outlook in China, contributes to pressure on benchmark oil prices. — Bloomberg
