'Saudi Arabia raises May Arab Light crude prices for Asia for 3rd month'
Business
'Saudi Arabia raises May Arab Light crude prices for Asia for 3rd month'
SINGAPORE (Reuters) - Saudi Arabia, the world's top oil exporter, has raised the prices of its flagship crude for Asian buyers for the third straight month, people familiar with the matter said.
The official selling price (OSP) for May-loading Arab Light to Asia was raised by 30 cents a barrel from April to $2.80 a barrel over Oman/Dubai quotes, they said.
The price increase is in line with a Reuters survey of sources from Asian refiners and follows a production cut from the Organization of the Petroleum Exporting Countries and their allies (OPEC+) which is expected to tighten the supply from the Middle East.
The OPEC+ group caught the market off guard on Sunday by announcing a 1.16 million barrels per day (bpd) cut from May to the rest of the year.
Saudi Arabia also raised the OSPs for Arab Medium and Arab Heavy, crude grades that contain more sulphur than Arab Light, by 30 cents and 50 cents in May respectively.
The size of the price increase on Arab Heavy follows a stronger demand for heavier crude in the region as new refineries designed to process heavy grade, such as PetroChina's Jieyang plant, are coming online.
"Higher OSPs would undoubtedly eat refiners' margins. But the key question is if and when Saudi's output cut is to have impact on supply to its term buyers," said a Singapore-based trader.
The market participants had expected that the OPEC+ production cut could prompt Asian refiners to seek more supply from Russia, Africa and the Americas.
