Saudi Arabia has lowered the price of crude oil for February delivery for all buyers, not just Asian countries as before.
But the cuts were the biggest for Asian importers, at $2 a barrel for all grades exported by Saudi Arabia, Energy Intelligence’s Amena Bakr said. Ă—post.
Interestingly, Aramco also reduced prices by the same amount for North American buyers, although previous price adjustments had more modest price reductions.
For European buyers, Aramco lowered February prices by $1.50 per barrel to $2.00 per barrel.
A refinery official in North Asia said, “Saudi Arabia’s crude oil is still relatively expensive compared to crude oil from other regions.However, we are fully satisfied that we can obtain such a price. “It’s much more affordable for people.” Said Reuters commented on the news.
The news agency said the latest price cut is the steepest in 13 months, but is in line with expectations, which also feature weaker oil markets in Asia. A month ago, a Bloomberg survey of refiners suggested Aramco could cut prices due to increased competition in Asian markets and lower oil prices from the U.S., Europe and Guyana. .
U.S. crude oil had become particularly attractive as a substitute for Middle Eastern crude because the price of Brent crude was close to parity with the Dubai benchmark. The cause of this unusual development was OPEC’s production cuts.
Meanwhile, just two months ago, Aramco raised oil prices for most buyers. For Asian buyers, this is the fifth consecutive price increase for the flagship Arab light, as Saudi Arabia curbed production to stimulate price hikes.
OPEC agreed late last year to cut crude oil production by 2.2 million barrels per day this quarter. So far, there have been no concerns about supply shortages and prices have remained relatively stable. Many traders appear to believe that even a 2.2 million barrel per day production cut would be enough to offset increased supplies from non-OPEC producers, even if everyone complies.
Written by Charles Kennedy, Oilprice.com