Saudi Arabia cuts oil for February

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Saudi Arabia has reduced the price of its crude oil for February delivery for all buyers rather than just Asian ones as it has done before.

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Interestingly, Aramco has also reduced the value to North American investors by the same amount, whereas in previous value adjustments, it had reduced those values more modestly.

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For European buyers, Aramco cut the February price to between $1. 50 and $2 a barrel.

“Saudi crude remains relatively more expensive than other regional crudes. But we are pleased to see those prices, which makes it much more affordable for us,” a source at a North Asian refinery told Reuters in comments on the news.

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U. S. oil has become particularly popular as an alternative to Middle Eastern crudes, with Brent crude near parity with Dubai benchmarks relative to those crude prices. The cause of this progression was OPEC’s production cut.

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OPEC agreed last year to cut its oil output this quarter to 2. 2 million barrels a day. So far, this hasn’t raised any concerns about the scarcity of sources, which has kept costs relatively stable. Many investors seem to believe that even a cut of 2. 2 million b/d – if everyone complies – would be enough to offset the accumulation of sources from non-OPEC producers.

By Charles Kennedy for Oilprice. com

Further reading in Oilprice. com:

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