Saudi Aramco is moving to raise the official selling prices of oil to its customers in Asia, Europe and America during next April.
A Reuters survey, seen by the specialized energy platform, showed that the world’s largest oil exporter may raise the price of Arab Light crude by about $0.4 for April shipments, compared to March shipments.
The increase that Saudi Aramco intends to implement in oil selling prices comes amid prospects for a recovery in demand in China, after spot transactions during the current month showed an increase.
Saudi oil price
Saudi Aramco plans to raise the price of Arab Light crude by about 40 cents in April to $2.40 a barrel above the Dubai/Oman average, according to five respondents polled by Reuters, after boosting Middle East crude standards.
Saudi Arabia unexpectedly raised the price of Arab Light crude for the month of March to Asia, the first price increase in 6 months.
And Aramco decided, in early February, to raise the official selling prices for Arab Light crude to Asia by 20 US cents to two dollars per barrel, above the average prices of the Sultanate of Oman / Dubai, according to the pricing document that was seen by the specialized energy platform.
It also decided to raise all prices for European buyers by $2 a barrel, and most prices for the United States by about 30 cents.
The rise for the second month in a row indicates strong market confidence in demand growth, according to data seen by the specialized energy platform.
Chinese demand
China, the largest buyer of crude in the eastern Suez market, has intensified its purchases over the past two months, as the state-backed Sinopec Refining Company acquired at least 17 shipments of UAE Upper Zakum crude from the spot market in February, along with several shipments of crude from other countries. other in the Middle East.
Respondents also expected Saudi Arabia to give its heavy grades a larger price increase in April, with Arab Medium and Arab Heavy crude increasing by about 80 cents and $1 per barrel, respectively.
One of the participants in the survey said: “The market is betting on the resumption of Chinese demand to support high crude oil prices,” noting that Chinese refineries are able to process high-sulfur, medium and heavy crude oil.
PetroChina is preparing to start its 400,000-bpd refinery in southern China’s Guangdong Province, which is designed to process heavy grades.
Another trader said: “Asian refiners will be encouraged to seek more arbitrage shipments if prices are attractive enough.”
Aramco’s official prices for Saudi crude are usually announced on the 5th of every month, and set the trend for Iranian, Kuwaiti and Iraqi prices, affecting about 9 million barrels per day of crude destined for Asia.
Aramco determines the price of a barrel of Saudi oil based on customer recommendations, and after calculating the change in the value of its oil over the past month, based on revenues and product prices.
Middle East crude prices
Middle Eastern crudes are struggling to compete with rising inflows from Russia, as Moscow diverts more oil – including Arctic crude – to the Asian market from Europe.
Calculations based on data from the Dubai Mercantile Exchange showed that the official selling price of Omani crude rose $1.31 to $82.23 a barrel in April.
The official selling price of Omani crude for April is the average daily settlement of crude for the front-month contract at 08:30 AM GMT (11:30 AM Mecca) throughout the month of February.
The official selling price for Dubai crude, set at a discount of $0.20 per barrel to Omani crude on the Dubai Mercantile Exchange, was calculated at $82.03 for the month of April.
The prices of Oman, Dubai and Murban benchmark crudes in the Middle East rose in the last trading days in February today, Tuesday, to end the month with an increase in average premiums compared to January.
The market structure in Dubai, which reflects the price differential between the first and third months, is estimated at around $2.04 a barrel this month, compared to $1.22 in January, on the back of expectations of higher demand in the region.
The average premium for Murban Light, sour crude, was $3.30 per barrel over Dubai prices in February, up from $3.05 per barrel last month.
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