Reuters believes that Saudi Arabia, the world’s largest exporter of crude oil, will increase its selling prices to Asia during the month of November.
The seasonal winter demand, as well as the return to operation of several Japanese crude oil refineries that had been shut-down have caused demand in Asia to increase; a point that the Middle East will take note of when it comes to setting their new official selling prices (OSPs).
A group of traders have predicted that Saudi Arabia will increase the OSP for Arab Light by 40 cents a barrel; the OSP for Arab Extra Light by 50 cents a barrel; Arab Medium by 30 cents a barrel; and the OSP of Arab Heavy by 5-10 cents a barrel.
Saudi Aramco, the world’s largest oil company, sets its crude oil prices based on recommendations from customers, and by analysing the changing value of its oil over the previous month. Saudi Aramco’s prices then heavily influence the other oil producers in Saudi Arabia.
Saudi Arabian OSPs are generally announced on the fifth of the month and influence the prices of nearly seven million barrels a day of oil production capacity in the Middle East; from Iran, Kuwait, and Iraq.
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com