Saudi Arabia lowers oil prices for February. Is OPEC changing course?
Saudi Arabia reduced the price of its crude oil for February delivery to all buyers and not just Asian ones, as it did previously.
The cut for Asian importers was the deepest, however, amounting to $2 a barrel for all types of oil exported from Saudi Arabia, Energy Intelligence's Amena Bakr said in an X post.
Interestingly, Aramco also cut the price for North American buyers by the same amount, whereas in previous price adjustments it had reduced these prices more modestly.
For European buyers, Aramco cut February prices to between $1.50 and $2 a barrel.
“Saudi crude is still relatively more expensive than other regional crudes. But we are quite happy to see these prices, which make it much more accessible for us,” a source at a North Asian refinery told Reuters commenting on the news.
The news agency noted that the price cut was the deepest in 13 months, but was in line with expectations, which also called for a softer Asian market for crude. A month ago, a Bloomberg survey of refiners suggested that Aramco would cut prices due to intensifying competition for the Asian market and cheaper crude from the United States and Europe, as well as Guyana.
Oil from the United States has become particularly attractive as an alternative to Middle Eastern crudes, as Brent has moved closer to parity with the Dubai benchmarks against which these crudes are priced. The cause of this unusual development was OPEC's production cuts.
Meanwhile, just two months ago, Aramco increased the prices of its crude oil for most of its buyers. For Asian buyers, it was the fifth price increase in a row for the flagship Arab Light, as Saudi Arabia cut production to spur price increases.
Late last year OPEC decided to reduce oil production by 2.2 million barrels per day for this quarter. So far, this hasn't sparked any concerns about tight supply, keeping prices relatively stable. Many traders seem to believe that even a 2.2 million bpd cut – if everyone sticks to it – would be enough to offset the increased supply from non-OPEC producers. However, all this has a cost: OPEC countries maintain prices by selling less oil, non-OPEC countries can sell at the high international price without imposing any quotas. A situation that cannot continue forever.
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The article Saudi Arabia lowers oil prices delivers February. Is OPEC changing course? comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/larabia-saudita-abbassa-i-prezzi-del-petrolio-consegna-febbraio-lopec-cambia-rotta/ on Mon, 08 Jan 2024 14:12:50 +0000.