Saudis cut price for flagship crude oil

ARAB LIGHT: Saudi Arabia cuts price of benchmark crude. (Getty Images)

Saudi Arabia announced on Sunday a cut in the official selling price for its flagship Arab Light crude for May, countering earlier market expectations for a lift after firmer gas oil cracks and Dubai crude recently.

The gas oil crack averaged $7.74 a barrel above Dubai swaps in March, down 52 cents from the February average, according to Reuters data. But the crack rose towards and above $10 during the last week of March, prompting hopes of a demand recovery.

"I believe there remains some serious concern that demand is still not anywhere close to being healthy," a trader said.

"So raising prices isn't going to be very beneficial for the market."

The world's top oil exporter cut prices for most of its crude oil exports in May to refiners globally, the state oil firm Saudi Aramco said.

Customers in the United States saw the biggest fall in prices as Aramco cut the differential for Arab Light by $4.15 a barrel to WTI minus $2.25, and Arab Heavy by $5.50 a barrel to WTI minus $4.85.

The lower differentials for the Arab Heavy grade was largely in line with market expectations due to earlier weakening fuel oil crack.

The fuel oil crack nearly halved in March, averaging about $7.24 a barrel below Dubai swaps, Reuters data show, down from a strong discount of $3.86 for February.

The world's top oil exporter's official selling prices (OSPs) set the trend for Iranian, Kuwaiti and Iraqi prices, affecting some 7 million barrels per day (bpd) of crude sold to Asia. (Reuters)

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