Weaker Asian Market Could Prompt Saudi Arabia To Halt Oil Price Hikes - OilPrice.com
Weaker Asian Market Could Prompt Saudi Arabia To Halt Oil Price Hikes | OilPrice.com
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Saudi Aramco is expected to keep the price of its flagship crude grade for shipping to Asia in December unchanged from November’s pricing in view of lower refining margins in its top market, a Bloomberg survey showed on Monday.
Saudi Arabia’s state oil giant Aramco typically announces the prices for the following month around the fifth of each month, setting the pricing trend for the other Middle Eastern oil exporters.
A possible pause in the hikes of Saudi Arabia’s official selling prices (OSPs) for the Arab Light grade for Asia for December would be the first in six months if the expectations of the traders and refiners in the Bloomberg survey turn out right.
Lately, refining margins in Asia have started to weaken, dampening demand for physical crude cargoes, according to Bloomberg.
Early this month, Saudi Arabia extended its voluntary production cut of 1 million barrels per day (bpd) through December 2023 and on the following day Aramco raised the OSP for its flagship crude grade for Asia for a fifth consecutive month.
Saudi Aramco raised the price of Arab Light, its flagship crude grade, for Asia for November loading. The price hike of $0.40 per barrel was the fifth consecutive increase for the Arab Light blend to Asia, bringing the OSP to $4 a barrel over the Oman/Dubai average, the Middle Eastern benchmark, off which grades going to Asia are being priced.
The increase in Saudi prices for most grades to most markets in November was largely expected by refiners and traders amid strong demand and tightening supply as OPEC+ and its key market movers Saudi Arabia and Russia continue to restrict crude oil production and exports.
Saudi Aramco has reportedly told at least four refiners in North Asia that it would supply them with the full contractual volumes they had nominated for November.
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By Tsvetana Paraskova for Oilprice.com
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Related Knowledge Center: ENERGY BASICS: petroleum
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