(MENAFN- Gulf Times) 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 US.
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 discount for Arab Light to Asia by 55 cents a barrel, according to the median estimate in a Bloomberg survey of six refiners and traders.
The profit that refiners in Asia make from turning crude into gasoline and diesel rose from $15.93 per barrel on November 30 to $17.66 per barrel on Dec. 31, data compiled by Bloomberg show.
Saudi Arabia, the largest producer in Opec, won't limit production and will seek to supply any demand from the market, Ali al-Naimi, the country's oil minister, said on December 30 on state television.
The country pumped 10.25mn barrels daily last month, according to data compiled by Bloomberg. The Organisation of Petroleum Exporting Countries decided last month to set aside any formal target for production. The group has exceeded its previous target of 30mn bpd since May 2014, data compiled by Bloomberg show.
Brent crude tumbled 35% last year as Saudi Arabia and other members of Opec chose to protect their market share instead of cutting output in an effort to support prices. Brent dropped from more than $100 a barrel in July 2014 to trade at about $37 yesterday amid a global glut.
Saudi Aramco reduced the premium for Arab Extra Light crude to the US by 50 cents a barrel to $2.35 a barrel more than the benchmark and kept price differentials for all other grades to the US unchanged from January.
The company widened discounts for sales of all grades of crude to Northwest Europe for February, while keeping discounts for all crudes but Arab Light unchanged for buyers in the Mediterranean region.
Middle Eastern producers are competing increasingly with cargoes from Latin America, North Africa and Russia for buyers in Asia, its largest market. Producers in the Gulf region sell mostly under long-term contracts to refiners. Most of the Gulf's state oil companies price their crude at a premium or discount to a benchmark. For Asia the benchmark is the average of Oman and Dubai oil grades.
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