Saudi Arabia has reduced its official selling price for Medium grade crude to Asia for November to a discount of $3.20 a barrel, reported Bloomberg.
This is below the regional benchmark, set in Dubai, and compared to the $1.30 discount for October, announced Aramco in an email statement.
This is the widest discount taken by Saudi Arabia since March. Aramco also raised price levels for light, medium and heavy crude for buyers in Northwest Europe, while trimming the prices for the same three grades to the Mediterranean region.
“They needed to cut pricing to keep Saudi crude competitive with other grades,” explained Robin Mills, an analyst with Manaar Energy Consulting in Dubai. “Demand has been a bit weaker, leading to the cuts.”
According to Reuters the Dubai benchmark itself weakened last month, with rumors circulating that Saudi Arabia was planning a price reduction in response to maintain its’ OPEC market share, traders said.
Lower prices could draw more Saudi crude to Asia, JBC Energy analysts said.