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Saudi Arabia kept the price of its flagship crude grade for shipping to Asia in December unchanged from November’s pricing in a widely expected move amid weakening refining margins.
Saudi Aramco, the world’s top crude oil exporter, set the price of its flagship Arab Light grade loading for Asia in December at $4.00 per barrel above the Oman/Dubai average, the Middle Eastern benchmark, off which grades going to Asia are being priced, according to a statement by the oil giant quoted by Reuters.
The Saudi decision to hold the price of Arab Light for Asia steady in December versus November was expected by traders and market participants as refining margins in Asia have started to weaken, dampening demand for physical crude cargoes.
The pause in the price hikes of Arab Light to Asia is the first in six months, after five consecutive months in which Saudi Arabia had raised the price of its flagship crude grade to its top export market.
However, the Saudis lifted the price of Arab Extra Light to Asia in December for a third consecutive month due to higher spot prices of the light sour grades. Arab Extra Light loading in December for Asia will cost $0.70 more than in November and is priced at $4.05 per barrel over the Oman/Dubai average.
Aramco kept the price of Arab Light to the United States unchanged from November and slashed the price of the grade to northwest Europe by $2.30 per barrel, to $4.90 a barrel above ICE Brent.
The pricing announcement comes hours after Saudi Arabia said on Sunday it would continue with its extra voluntary production cut of 1 million barrels per day (bpd) in December and will pump around 9 million bpd next month, as it has been doing since July.
“This voluntary cut decision will be reviewed next month to consider extending the cut, deepening the cut, or increasing production,” the Saudi Press Agency reported on Sunday, citing an official source from the Ministry of Energy.
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.