Saudi Arabia expected to raise April crude prices to Asi
Saudi Arabia expected to raise April crude prices to Asi
SINGAPORE: Top oil exporter Saudi Arabia is expected to raise prices for most of the crude it sells to Asia in April, following robust demand for Middle East grades, trade sources said on Tuesday.The official selling price (OSP) for flagship Arab Light could rise by about 50 cents a barrel from March, a Reuters survey of five refiners showed.Benchmark Dubai prices fell below $30 a barrel at the start of this year, boosting demand for Middle East and Russian crude in Asia.That pushed up prompt prices against future-dated ones, narrowing the market’s contango structure, one of the triggers for the OPEC kingpin to raise prices.”In theory, it (Arab Light) will go up 60-70 cents,” a trader with a North Asian refiner said, but added that a rise of 30-40 cents was more likely as it would have to compete with crude from Abu Dhabi National Oil Company (ADNOC).The approach of the peak summer driving season in the United States may support a bigger price hike for Arab Extra Light on stronger demand for gasoline blendstock, he said.Three of the respondents expect Saudi Arabia to limit the price increase for Arab Heavy as the grade has become more expensive than Iraqi Basra Light for March.Basra Light crude loading in March, with an API gravity of 30 degrees, is 15 cents a barrel cheaper than Arab Heavy, a second North Asian refiner 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 (bpd) of crude bound for Asia.State oil giant 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.