But the world’s top oil exporter left prices stagnant in northwest Europe and the United States.
Saudi Arabia, the world’s top oil exporter, slashed prices of all crude grades for Asian customers in October versus September, but left prices stable in northwestern Europe and the United States.
The deep price cut comes as lockdowns across Asia to combat the highly contagious delta version of the coronavirus have hit fuel demand in the region. global oil supply The Organization of the Petroleum Exporting Countries and their allies, a grouping known as OPEC+, are increasing production by 400,000 barrels per month between August and December.
Kingdom oil company Saudi Aramco cut the official selling price (OSP) of Arab Light crude for delivery in Asia in October for the first time in four months at a premium of $1.70 a barrel, below the average of DME Oman and Platts Dubai crude, a Pricing document according to the company. The difference in prices in September was a premium of $3 per barrel, the highest since February 2020.
The $1.30 price cut for October versus September was the biggest monthly decrease in a year, and took the market by surprise as buyers were expecting a 20-40 centsa barrel drop in prices in line with the change in Dubai benchmark prices .
Oil traders in Asia said a deep cut in prices is likely to boost demand for Saudi crude.
“This is what the Saudis want,” said one of the businessmen.
However, Saudi Arabia is likely to join another price war was diluted with other producers, traders and analysts said.
“Demand is temporary. If they go down that path, they will reverse a lot of the inventory normalization they achieved in the last 12-18 months,” said Virendra Chauhan, Energy Aspects analyst.
Elsewhere, Saudi Aramco kept the light crude oil price differential in northwest Europe unchanged, at a discount of $1.70 a barrel versus ICE Brent crude. This kept the price differential of light crude oil unchanged at a premium of $1.35 a barrel versus ASCI in the United States.
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