FX.co ★ Saudi Arabia may lower oil prices for Asian buyers

Saudi Arabia may lower oil prices for Asian buyers in February after a sharp increase in oil prices this month.

According to a Reuters report citing industry insiders and survey data, the Kingdom may reduce prices for all of its export grades by $ 1 a barrel or more, pushing those prices down to their lowest levels in three to four months.

Earlier in December, Saudi Arabia raised its official selling oil prices for Asia by $ 0.60 per barrel, which is $ 3.30 per barrel higher than the benchmark for Oman.

The price increase suggests strong demand expectations, which in turn, means Saudi Arabia is not particularly concerned about the Omicron news, which caused oil prices to decline more than $ 10 at the end of November when the Brent crude price plunged below $ 70 per barrel at some point.

According to the report, Reuters said that global prices rose in December, but the premium on the spot market for varieties from the Middle East fell more than 50%. The drop was the result of an increase in OPEC+ production.

The price decline for February is partly due to the anticipation of lower demand from Asian buyers as refineries on the continent prepare for the maintenance season in the second quarter of the year.

Saudi Arabia will announce its official selling oil prices after the January OPEC+ meeting, which will take place on the 4th. Asia accounts for more than half of Saudi oil exports.

Earlier in December, the Kingdom reported that crude oil exports accounted for 77.6 percent of total exports in October, compared with 66.1 percent a year earlier. The cost of oil exports was higher than a year ago due to higher crude oil prices.