Oil spikes, reversing losses after Saudi hikes crude prices

By Nia Williams

(Reuters) - Global oil prices spiked at midday on Monday, with benchmark Brent turning positive after a big hike in Saudi Arabia's monthly export prices was viewed as a signal OPEC's largest producer may be seeking to curb output.

State oil firm Saudi Aramco said it would raise the price of its flagship Arab light crude in December for customers in Asia and Europe, reversing some price cuts the previous month. It will cut prices for U.S. buyers.

The kingdom has signalled it was willing to put up with lower oil prices, and last month's big price cuts had triggered a deeper decline in global markets. The higher prices for December cargoes may now discourage buyers, some said.

Oil traders may see the latest price hikes as an indication that the Saudis are now "less worried about market share and more concerned about crude prices," said Joseph Posillico, senior vice president of energy derivatives at Jefferies LLC.

Brent turned positive to last trade up 26 cents at $86.11 per barrel by 1842 GMT. Earlier it had slipped below $85 as a stronger dollar punished oil and gold, commodities that are priced in the U.S. currency.

U.S. crude also pared earlier losses and briefly turned positive. It was last down 23 cents ar $80.31 per barrel.

(Additional reporting by Christopher Johnson in London, Catherine Ngai in New York and Seng Li Peng in Singapore; Editing by Dale Hudson, David Evans, Peter Galloway and Andrew Hay)