Saudis raise crude prices to Asia after Opec+ adds barrels
[SINGAPORE] Saudi Arabia raised crude prices for a second consecutive month, signalling confidence in demand for its barrels as Organization of the Petroleum Exporting Countries and its allies (Opec+) continues to ramp up supply.
State producer Saudi Aramco will raise the premium for Arab Light crude to Asia by US$1 a barrel for shipments in September, to US$3.20 a barrel, according to a price list seen by Bloomberg, the highest since April. The company was expected to increase the price of the grade by 90 cents a barrel, according to a survey of refiners and traders.
The world’s biggest exporter has been leading the Opec+ in raising output as they seek bigger market share. So far, burgeoning demand for transport fuels has bolstered refining margins and helped the market to absorb the added barrels. Aramco chief executive officer Amin Nasser said this week that he’s bullish that it will continue.
“The strength in oil market fundamentals is supporting demand for our crude and products,” Nasser told reporters on an earnings call. “We expect the second half to be more than 2 million barrels per day higher than the first half.”
In contrast to the hikes to Asian buyers, the kingdom cut prices for its European customers by the most in a year. All values to Europe were cut by US$1.30. Prices for shipments to the US nudged slightly higher.
Many analysts and traders expect that the bulk of added output from Opec+, which is set to come this month and next, could weigh on prices later this year. Wall Street firms such as JPMorgan Chase and Goldman Sachs anticipate that prices will sink towards US$60 a barrel in the fourth quarter.
On Sunday, Opec+, which includes partners such as Russia, agreed to raise production by 547,000 barrels a day in September. The planned increase, following a similar-sized boost for August, came as traders are waiting to see how US President Donald Trump’s threats to punish Russia over the war in Ukraine could affect the market.
Brent crude has held near US$70 a barrel lately as traders balance the Opec+ output hikes against the prospect of potential US measures against Russian oil sales. BLOOMBERG
