The Saudis will reduce OPEC + supply prices as buyers buy fuel

(Bloomberg) – Saudi Arabia has slashed oil prices in Asia by more than expected in the coming month, a sign that the world’s largest raw material exporter is trying to trick many of them into taking more barrels.

State producer Saudi Aramo is pushing prices across Asia to all levels. The Cornevirus epidemic has left experts with three consecutive months of increase in official sales prices in connection with the recovery of energy demand.

But with Brant’s turnover up 40% this year, OPEC + sees enough demand – and a potential shortfall at the end of the year – to boost production. That increase means barrels competing for cautious buyers. Saudi Arabia, which sells all oil on long-term contracts, is at risk of losing customers if its monthly prices are too high.

Giovanni Stunovo, a commodity analyst at UBS Group AG, said: Ararako now wants buyers to take more Saudi crude. With domestic demand declining in the fall, they have more barrels to export, so this is another reason to offer a more attractive OSP.

Aramco is depreciating by $ 1.30 per barrel above the regional average for crude oil production, the statement said. A survey of six traders and refineries in Asia last week is expected to reduce the price of crude oil by about 60 cents.

Aramco’s biggest customers in Asia are surprised by the reductions. According to buyers, the Saudis are trying to compete with other producers and gain market share from competitors.

Those refineries have been struggling to make huge profits, such as gasoline and diesel. Saudi Arabia exports more than 60% of its raw materials to Asia, with China, South Korea, Japan and India the largest buyers.

Aramco has not changed its price for the United States and Northwestern Europe in October. For buyers in the Mediterranean, Aramo is reducing prices by 10 cents per barrel at all levels.

That country does not want to increase sales in the United States when it takes strategic backups, Stavanovo. Filter capacity shuts down in the Gulf of Judah after the devastating Ida Storm.

OPEC + has decided to continue last month’s supply cuts to support prices due to reduced demand for coronavirus. Saudi Arabia and Russia-led oil exporters and partners are working hard to bring oil back to the market in a bid to reduce the economic recovery.

The group agreed in July to increase production by more than 400,000 barrels a month to reduce production next year. Demand has improved in depth over the past year and OPEC + reductions helped support Brent trading markets at around $ 73 a barrel last week.

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