RIYADH, 6th January 2016 (WAM) — Saudi Arabia, the world’s largest crude exporter, raised pricing for all February oil sales to Asia amid higher refining margins in the region. It kept levels unchanged for most grades sold to the U.S. as producers compete for market share amid a global supply glut, Bloomberg News reported.
State-owned Saudi Arabian Oil Co. increased its official selling price for Arab Light crude sold to Asia by 60 cents a barrel to 80 cents below the regional benchmark, it said in an e-mailed statement. The company, known as Saudi Aramco, was expected to narrow the grade’s discount by 55 cents a barrel, according to the median estimate in a Bloomberg survey of six refiners and traders.
Saudi Arabia, the biggest producer in the Organisation of Petroleum Exporting Countries, is competing for market share amid a global supply glut that cut prices 35 percent last year. The kingdom pumped 10.25 million barrels daily in December, according to data compiled by Bloomberg. Lower crude costs are helping boost returns for oil refiners in Asia, the region where most Middle Eastern crude is sold.
“That’s the market where refining margins are the most attractive,” Richard Mallinson, an analyst at Energy Aspects Ltd., said by phone from London. “Aramco’s aim is to achieve the best prices without going in at a level that would make their crude less competitive against other grades.”
Saudi Arabia won’t limit production and will seek to supply any demand from the market, Ali Al-Naimi, the country’s oil minister, said on 30th December on state television.
OPEC decided last month to set aside any formal target for production. The group has exceeded its previous target of 30 million barrels a day since May 2014, data compiled by Bloomberg show.