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2020-07-07 16:10:00

SAUDI'S OIL PRICES UP

SAUDI'S OIL PRICES UP

BLOOMBERG - 6 July 2020 - Saudi Arabia raised pricing for August oil shipments to Asia, the U.S. and northern Europe amid signs that energy demand is recovering from its coronavirus-triggered collapse.

The world's biggest crude exporter is increasing rates as it pushes other major producers to keep cutting supply to re-balance the market.

State producer Saudi Aramco lifted the official selling price for its flagship Arab Light crude to buyers in Asia, its biggest market, for a third consecutive month, though by less than expected. Aramco raised pricing to the U.S., where it's also reining in shipments, for a fourth month.

"The increase in prices reflects the overall recovery in oil markets," said Carole Nakhle, chief executive officer of London-based consultant Crystol Energy. "Demand growth remains uneven and may even be subject to temporary reversals, but it is unlikely to fall off a cliff because lockdowns, if re-introduced, are likely to be more localized."

Arab Light crude to Asia rises to $1.20 a barrel above the Middle East benchmark, compared with a 20-cent premium for July, the company said in a statement. Traders and refiners, who are struggling with low margins, expected the premium to climb to $1.45.

Aramco raised U.S. pricing by between 20 cents and 40 cents a barrel. Light crude will sell at a premium of $1.65 a barrel, up by 30 cents, the company said. It also increased rates for most grades sold to northwestern Europe -- the main hub for which is Rotterdam. The only reductions are to the Mediterranean region, where Aramco pared prices by as much as $1 a barrel.

Saudi Arabia and Russia have led efforts by the OPEC+ producer alliance since April to reduce output and drain stockpiles. The group agreed in June to extend cuts totaling nearly 10 million barrels a day -- roughly 10% of world supply before the pandemic hit -- for a third month until the end of July. They plan to scale them back after that.

AUGUST OSPS TO ASIACHANGEPREMIUM
Arab Super Light +$1/bbl $2.65/bbl
Arab Extra Light +$1 $1.20
Arab Light +$1 $1.20
Arab Medium +$1 $1.20
Arab Heavy +$1 $0.90

 

OPEC+ is "on the right track" but still has "a long way to go" before re-balancing oil markets, Saudi Energy Minister Prince Abdulaziz bin Salman said in mid-June. The Saudis slashed their crude shipments last month to a multi-year low, according to Bloomberg tanker tracking.

Brent crude has more than doubled since OPEC+'s April agreement to around $43 a barrel. The global benchmark is still down 34% this year.

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Earlier:

SAUDI'S OIL PRICES UP
2020, July, 2, 12:00:00
SAUDI ARAMCO'S OPTIMISM
There are different forecasts looking at between 95 and 97 MMbd by year-end
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Tags: SAUDI, ARABIA, ARAMCO, OIL, PRICE