FX.co ★ Saudi Arabia pushes oil prices up

Saudi Arabia's move to increase oil prices could backfire as both US and Russia offered alternatives at more competitive prices.

Just recently, Saudi Aramco raised the prices of its Arab medium and heavy grades by 20-30 cents a barrel.

But even if it is less than the price quoted by Aramco in Dubai, other varieties such as Mars and Urals were offered at prices lower than last month.

This could result in customers seeking to buy smaller contract volumes from the company.

Aramco will most likely notify its customers this week, which could also mean that the spot market will remain sluggish.

Nevertheless, shipments are accelerating, thanks to OPEC agreeing to restore production. The members decided at the meeting last month to ramp up production by the end of the year. But most analysts still believe that the market will face supply shortages amid the global economic recovery.

Saudi Arabia ships over 60% of its crude oil exports to Asia, with China, South Korea, Japan and India being the main customers.