Saudi Aramco said to raise oil pricing to Asia for December sales
Saudi Arabia, the world’s largest crude exporter, raised pricing for December sales of all oil grades to Asia, according to people with knowledge of the matter.
State-owned Saudi Arabian Oil Co., known as Saudi Aramco, increased its official pricing for Arab Light crude to Asia by 90 cents a barrel, to a premium of 45 cents over the regional benchmark, said the people, who asked not to be identified because the information wasn’t public.
The company had been expected to increase pricing for shipments of Arab Light by 85 cents a barrel, according to the median estimate in a Bloomberg survey of six refiners and traders in the region.
Saudi Aramco narrowed the discounts for its Arab Medium and Arab Heavy grades to Asia and raised the premiums for Arab Extra Light and Arab Super Light to the region, the people said.
Oil has gained about a quarter this year amid efforts by OPEC to limit production to reduce a global supply glut, which contributed to a drop in crude prices to about half their 2014 levels. Saudi Arabia boosted output to a record in July.
Two months later, the Organization of Petroleum Exporting Countries ended a two-year, Saudi-led policy of letting members pump as much as possible to push higher-cost producers out of the market. OPEC aims at a November 30 meeting in Vienna to allocate production quotas to individual members.
Supply and demand will be in balance by the end of this year, helping to push prices higher in the first half of 2017, Amin Nasser, Aramco’s chief executive officer, said on November 1 in Riyadh. Demand is set to grow on average by about 1.2 million barrels a day this year and next, Nasser said.
Middle Eastern producers are competing with cargoes from Latin America, North Africa and Russia for buyers in Asia, their 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.