Saudi Arabia to lower oil prices for asia amid weak demand
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Saudi Arabia is expected to reduce its official oil selling prices for Asian buyers in December, reflecting weaker demand signals, according to industry sources cited by Reuters. The anticipated price cuts range between $0.30 and $0.50 per barrel, aligning with the recent performance of the Dubai oil benchmark.
Projected Price Reductions for Key Saudi Oil Grades
Based on feedback from six refining industry insiders, Reuters forecasts price adjustments across several Saudi crude grades. December price reductions are expected to be around:
$0.30-$0.50 per barrel for Arab Extra Light and Arab Light Up to $0.40 per barrel for Arab Medium and Arab Heavy These reductions come as refining demand for heavier, high-sulfur grades remains strong, driven largely by the shipping industry’s need for high-sulfur fuel oil. The demand spike stems partly from ships navigating longer routes to avoid Middle Eastern waters due to regional conflicts, a trend Bloomberg reported earlier this week.
Bullish Impact on International Oil Prices
A price cut could weigh on global oil prices, signaling that Saudi Arabia perceives demand as weak enough to require adjustments. This sentiment shift might amplify a bearish outlook among traders, potentially driving prices further down.
High-Sulfur Fuel Oil Demand Supports Heavier Grades
Despite stricter emissions standards, demand for high-sulfur fuel oil has remained robust, partly due to the installation of sulfur scrubbers on ships. This trend, combined with shrinking discounts relative to the Singapore crude benchmark, reflects increased appetite for heavier fuel grades in the refining sector.
As December approaches, markets will watch closely to gauge whether these pricing adjustments impact broader sentiment or signal a longer-term demand shift in Asian markets.
Projected Price Reductions for Key Saudi Oil Grades
Based on feedback from six refining industry insiders, Reuters forecasts price adjustments across several Saudi crude grades. December price reductions are expected to be around:
$0.30-$0.50 per barrel for Arab Extra Light and Arab Light Up to $0.40 per barrel for Arab Medium and Arab Heavy These reductions come as refining demand for heavier, high-sulfur grades remains strong, driven largely by the shipping industry’s need for high-sulfur fuel oil. The demand spike stems partly from ships navigating longer routes to avoid Middle Eastern waters due to regional conflicts, a trend Bloomberg reported earlier this week.
Bullish Impact on International Oil Prices
A price cut could weigh on global oil prices, signaling that Saudi Arabia perceives demand as weak enough to require adjustments. This sentiment shift might amplify a bearish outlook among traders, potentially driving prices further down.
High-Sulfur Fuel Oil Demand Supports Heavier Grades
Despite stricter emissions standards, demand for high-sulfur fuel oil has remained robust, partly due to the installation of sulfur scrubbers on ships. This trend, combined with shrinking discounts relative to the Singapore crude benchmark, reflects increased appetite for heavier fuel grades in the refining sector.
As December approaches, markets will watch closely to gauge whether these pricing adjustments impact broader sentiment or signal a longer-term demand shift in Asian markets.