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The world’s largest crude oil exporter, Saudi Arabia, left the official selling price of its flagship Arab Light grade unchanged for November loadings compared to October, sources familiar with the latest pricing told Reuters on Thursday.
Saudi Arabia’s Arab Light will sell in November to Asia at a premium of $5.85 per barrel over the average of the Oman/Dubai benchmarks, unchanged from this month, according to Reuters’ sources.
Refiners and analysts in Asia were expecting a rise in Saudi oil prices for Asia for November in response to signs of recovering crude demand in one of its biggest markets and the new batch of fuel export quotas issued by Beijing.
As a result of this higher demand, Saudi Arabia’s official selling prices were expected to rise by $0.25 per barrel for the flagship Arab Light crude, refiners participating in a Reuters survey said.
On the one hand, the new quotas suggest higher near-term demand for crude. On the other, refining margins have sunk after the announcement of the new quotas in anticipation of a flood of new fuel supply. As a result, survey respondents forecast a relatively moderate hike in Saudi Arabia’s prices.
But Saudi Arabia left the Arab Light price unchanged, as well as the Super Light prices for November in Asia unchanged. The Kingdom cut the Extra Light price by $0.10 per barrel to a premium of $6.35 over Oman/Dubai, and raised by $0.25 a barrel the prices of Medium and Heavy grades.
Saudi Aramco, which releases official selling prices (OSPs) for the following month around the fifth of each month, also typically releases the prices after the monthly OPEC+ meeting.
At the OPEC+ meeting on Wednesday, the alliance agreed to cut the collective oil production target by 2 million barrels per day (bpd). The actual cut would be around 1 million bpd, of which Saudi Arabia, which has been trying to produce to quota, will reduce 526,000 bpd of output as of November and will have a target of 10.478 million bpd.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.