Saudi Arabia May Raise Its Oil Prices For A Fifth Consecutive Month
Saudi Arabia May Raise Its Oil Prices For A Fifth Consecutive Month | OilPrice.com
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Saudi Arabia may raise the official selling price of its flagship Arab Light blend for Asian buyers for the fifth month in a row, Reuters has reported, citing strong demand for the commodity.
The news outlet polled five respondents who said Riyadh could raise the price of the medium sour crude for November delivery by some $0.45 per barrel.
Last month, Saudi Arabia raised the official selling price for Arab Light for Asia by $0.10 cents per barrel to $3.60 a barrel over the Oman/Dubai average, the Middle Eastern benchmark, off which grades going to Asia are being priced.
The price increase was much smaller than an expected hike of $0.45 per barrel in a Reuters survey of five refining sources.
Meanwhile, speculation continues about whether the Saudis might decide to unwind their production cuts at the next OPEC+ meeting, scheduled for Wednesday.
“We do not believe that the group will change its output policy,” ING said in a note, referring to the common OPEC+ policy on production.
“However, what is possible (and a JMMC meeting is not needed for this), is Saudi Arabia starting to ease its additional voluntary supply cut of 1MMbbls/d.”
The prediction echoes one made last week by Rapidan Energy Group’s president Bob McNally.
“They do not want to deliberately over-tighten the market, because if you get a spike, then you get a demand collapse, and you get a bust,” McNally told Bloomberg Television in an interview.
Not everyone agrees, however.
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"There is no sign that Saudi will revise its output cut decision at this moment. So we expect no change on their determination of defending oil prices," one of the Reuters sources for the poll said.
Indeed, it would be a risky move for Saudi Arabia to start ramping up production right now: prices will immediately slump, which would render the cuts until now pretty much pointless.
By Charles Kennedy for Oilprice.com
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