The price increase follows a production cut from OPEC+, which is expected to tighten the supply from the Middle East.
Storage tanks and oil processing facilities operate beside the Arabian Sea at Saudi Aramco's Ras Tanura oil refinery and terminal in Ras Tanura, Saudi Arabia, on Monday, Oct. 1, 2018. The upcoming OPEC+ meeting in Vienna will result in an oil production cut "of some historic kind", said CIO of Pickering Energy Partners, Dan Pickering.Saudi Arabia, the world's top oil exporter, has raised the prices of its flagship crude for Asian buyers for the third straight month.
The official selling price for May-loading Arab Light to Asia was raised by 30 cents a barrel from April to $2.80 a barrel over Oman/Dubai quotes.of sources from Asian refiners and follows a production cut from the Organization of the Petroleum Exporting Countries and their allies, or OPEC+, which is expected to tighten the supply from the Middle East.cut from May to the rest of the year.
Saudi Arabia also raised the OSPs for Arab Medium and Arab Heavy, crude grades that contain more sulfur than Arab Light, by 30 cents and 50 cents in May respectively.The size of the price increase on Arab Heavy follows a stronger demand for heavier crude in the region as new refineries designed to process heavy grade, such as PetroChina's Jieyang plant, are coming online.
"Higher OSPs would undoubtedly eat refiners' margins. But the key question is if and when Saudi's output cut is to have impact on supply to its term buyers," said a Singapore-based trader.seek more supplyFor other regions, the top oil exporter set its Arab Light OSP to northwest Europe at $1 a barrel aboveMeanwhile, the OSP to the United States was raised by 10 cents from last month at $6.75 versus ASCI for May.
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