RIYADH: Pausing a five-month price hike cycle, Saudi Arabia kept its December official selling prices for the flagship Arab light crude it sells to Asia unchanged from the previous month at $4 a barrel versus the Oman/Dubai average, the oil company announced on Monday.
The top oil exporter slashed its Arab Light OSP to Northwest Europe by $2.30 a barrel to $4.9 per barrel above ICE Brent and to the US at $7.45 versus ASCI. The OSP to the US also remain unchanged from November.
The price change for the Saudi flagship grade is in line with market expectations, as refiners weighed weak oil processing margins and supply uncertainties.
Saudi Arabia confirmed on Sunday it would continue with its additional voluntary cut of 1 million barrels per day in December to keep output at around 9 million bpd, a source at the ministry of energy said in a statement.
Russia also announced it would continue its additional voluntary supply cut of 300,000 bpd from its crude oil and petroleum product exports until the end of December.
This reduction is in addition to the voluntary cuts the Kingdom had previously announced in April, when Riyadh agreed to reduce output by 500,000 bpd until the end of December 2024.
Oil prices rose on Monday following the oil producers’ decision.
Oil rebounded on Monday after Brent and West Texas Intermediate futures each lost around 6 percent in the week to Nov. 3.
ING analysts said in a note that the oil market will be in surplus in the first quarter of next year, “which may be enough to convince the Saudis and Russians to continue with cuts.” But price gains could have been capped by an easing of crude oil throughputs at Chinese refineries.