ALBAWABA – Market supply is tightening, as Saudi Arabia boosts oil prices to Asia and Europe for September on Saturday, amid rising demand, Bloomberg reported.
State-owned Saudi Aramco raised the price for Arab Light crude for sale to Asia to $3.50 a barrel above the benchmark. The hike was smaller than the Bloomberg-anticipated raise of $0.50 cents, according to a survey of refiners and traders, conducted by the New York-based news agency.
The move comes after Saudi Arabia, the world’s biggest oil exporter, extended a unilateral supply cut into September and said it could be prolonged further or even deepened, if needed.
Russia also pledged to reduce its exports.
Meanwhile, oil prices posted a sixth straight week of gains, the longest winning streak in more than a year, as reported by Bloomberg.
The Organization of Petroleum Exporting Countries and its allies including Russia, also known as OPEC+, extended cuts that were enacted earlier this year, as United States (US) stockpiles sank significantly.
The global economic outlook is clouded by lackluster data from China and fears of recession in the US. In the meantime, Riyadh may need prices of as high as $100 a barrel to cover government spending, according to Bloomberg Economics.
Nearly all official selling prices to the Mediterranean and Northwest Europe were higher for September. Arab Light crude in the Mediterranean was raised by $1 to $4.50 a barrel more than ICE Brent, while the price for the same grade to Northwest Europe was raised by $2 to a premium of $5.80 to the benchmark.
Aramco kept all the prices to the US unchanged for September.
The Saudi exporter sells about 60 percent of its crude shipments to Asia, most of them under long-term contracts, pricing for which is reviewed each month. China, Japan, South Korea and India are the biggest buyers.
