Saudi Arabia has cut the official selling price (OSP) for its benchmark Arab Light crude to Asia in August, as expected, while raising the price to European customers.
State oil company Aramco has lowered the August price for its Arab Light grade for Asian customers by 10 cents a barrel versus July, setting it at minus $0.10 to the Oman/Dubai average, it said on Sunday.
The top oil exporter raised its August OSP for its Arab Light grade to northwest Europe by 25 cents a barrel from the previous month at a discount of $2.65 a barrel to the Brent Weighted Average (BWAVE).
The Arab Light OSP to the United States was unchanged for August from a month earlier, set at a premium of $1.55 a barrel to the Argus Sour Crude Index (ASCI).
A Reuters survey on Wednesday forecast a cut for medium and heavy grades Aramco sells to Asia in August on weaker fuel oil cracks, while keeping price for its flagship light crude little changed.
The price cuts reflects lower crude demand in Asia as refining margins weakened. OPEC’s supply, at the highest for three years in June, also weighed on the market.
OPEC supply rose in June to 31.60 million barrels per day (bpd) from a revised 31.30 million bpd in May because of record, or near-record, output from Iraq and Saudi Arabia, a Reuters survey found.
Saudi Arabia and other members of the Organization of the Petroleum Exporting Countries (OPEC) left their group production target unchanged last month. The producing group chose to focus on building market share rather than defending world oil prices, which are down around 45 per cent from the middle of last year.
Saudi crude OSPs set the trend for Iranian, Kuwaiti and Iraqi prices, affecting more than 12 million bpd of crude bound for Asia.
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.