Saudi Arabia’s decision to cut oil prices to Asia for March cargoes by more than expected shows that the Kingdom is keen to keep market share and that the region’s demand is easing after winter.
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By themselves, neither of these factors are a big surprise, but what was unexpected was the extent of the cut in Saudi Aramco’s official selling price (OSP).
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The Kingdom cut the OSP on its benchmark Arab Light grade to Asia to $ 1.95 a barrel above Oman/Dubai, down a sharp $ 1.50 from February’s $ 3.45 premium.
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Traders surveyed by Reuters ahead of the Feb. 5 announcement had expected a cut of $ 1 a barrel in the OSP, meaning Saudi Arabia delivered a 50 percent bigger reduction than estimated.
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This took the premium to the lowest since October last year, and was also the biggest cut since February last year.
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Read more: http://www.arabnews.com/kingdom-keen-keep-asia-oil-market-share
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