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Saudis raise Asia and U.S. oil prices after shock output cut

11 January 2021 14:32 (UTC +04:00)

Saudi Arabia raised pricing for oil customers in Asia and the U.S. after its shock move this week to cut output sent crude prices climbing, APA-Economics reports citing Bloomberg.

A day after its unilateral decision during an OPEC+ meeting to slash oil production, the kingdom opted to increase prices for all grades shipped to the two regions in February.

State producer Saudi Aramco on Wednesday raised its flagship Arab Light oil to Asia, its biggest market, to $1 above the benchmark used by the company. That’s the highest level since August.

The increase of 70 cents from January’s shipments was more than the market had expected ahead of the OPEC+ gathering. The median estimate was for a hike of 40 cents, according to a Bloomberg survey of five traders in late December. All U.S. grades were raised by 20 cents.

Aramco lowered prices for the northwest European and Mediterranean regions, where energy demand has been hit by new coronavirus lockdowns over the past month.

It’s the second straight monthly increase for oil that the world’s biggest exporter sells to its main market. Some Asian nations have experienced higher energy demand in recent weeks, thanks in part to a cold winter.