By January 3, 2017 Read More →

Saudi Arabia to raise February term crude prices to Asia

Saudi Arabia

Shaybah oilfield complex is seen at night in the Rub’ al-Khali desert, Saudi Arabia. Reuters photo by Ali Jarekji.

Saudi Arabia cutting exports to Europe, US

By Florence Tan

SINGAPORE Jan. 3 (Reuters) – Top oil exporter Saudi Arabia is expected to raise prices for all grades of crude it sells to Asia in February, tracking strength in the Dubai price benchmark and robust refining margins, traders said on Tuesday.

The official selling price (OSP) for flagship Arab Light crude could rise by at least 50 cents a barrel for February, a Reuters survey of four traders showed.

The respondents expect bigger price hikes for heavier grades in February, pushed up by the strongest fuel oil cracks in five years.

Arab Heavy’s OSP could rise by as much as 90 cents to $1 a barrel in February, traders said.

The price hikes are “expected given stronger Dubai structure and stronger margins,” one of the traders said.

He added that the contango spread between the first- and third-month Dubai crude prices published by price reporting agency Platts in December narrowed by 55 cents to 60 cents a barrel from November, an indication of a stronger spot market. The price of oil for prompt delivery is lower than those for future months in a contango market.

Saudi Arabia had committed to cut its production in January by 486,000 barrels per day (b/d) to 10.058 million b/d in an agreement among members of the Organization of the Petroleum Exporting Countries.

Still, the producer agreed to export more oil, above contractual volumes, to some Asian customers in January, opting to cut supplies to Europe and the United States instead because of higher netbacks in Asia, trade sources said.Saudi crude OSPs are usually released around the fifth of each month, and set the trend for Iranian, Kuwaiti and Iraqi prices, affecting more than 12 million barrels per day (b/d) of crude bound for Asia.

Saudi Aramco sets its crude prices based on recommendations from customers and after calculating the change in the value of its oil over the past month, based on yields and product prices.

Saudi Aramco officials as a matter of policy do not comment on the kingdom’s monthly OSPs.

(Reporting by Florence Tan; Editing by Christian Schmollinger)

Ph: 432-978-5096 Website:

Ph: 432-978-5096 Website:

Posted in: News

Comments are closed.