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Saudi Arabia cut its monthly oil prices on Thursday for Asian buyers to the lowest level in at least 12 years as global oil prices remain depressed, while raising prices to Europe and the United States.
State oil firm Saudi Aramco cut the March official selling price (OSP) for its Arab Light crude to Asia by 90 cents a barrel from February. The $2.30-a-barrel discount to the Oman/Dubai average is the biggest since Reuters data was available in 2003.
Cuts in prices to Asia were largely expected, market participants said, particularly because of the weak products market. Others added that the kingdom did not want to give up market share in its largest market.
"Given the contango in diesel, lower Saudi OSPs to Asia are likely to be welcomed by refiners," said Dominic Haywood, an oil analyst at Energy Aspects in London.
The cuts, though, were smaller than the $1 a barrel expected by participants polled in a Reuters survey.
Meanwhile, Aramco lifted its March price for Arab Light grade to Northwest Europe, a region that buys only a small portion of crude from the kingdom, by 70 cents, putting it at a discount of $3.95 a barrel to the Brent Weighted Average (BWAVE).
The Arab Light OSP to the United States was set at a premium of 45 cents a barrel to the Argus Sour Crude Index (ASCI) for March, up 15 cents from February. The last time Aramco raised prices to the US market was in June for July OSPs, ahead of the seven-month rout that has slashed global prices by nearly 60%.
While the kingdom lifted prices, traders said that it was not an indication of falling interest in maintaining market share, pointing out that medium sour crudes were still competitive relative to similar US grades.
US imports of crude oil from Saudi Arabia fell to a five-year low in October, tallying 826,000 barrels per day (bpd), according to data from the US Energy Information Administration. Those imports jumped nearly 23% in November to a little over 1 million bpd.
