March 7, 2024 [BNN Bloomberg]- Saudi Arabia increased prices of its main oil grade to buyers in Asia next month after the OPEC+ group agreed to extend output cuts into the middle of the year.
Crude has traded in a tight range around $80 a barrel in London this year as concerns over demand and sluggish economic growth outweigh geopolitical risks linked to the war in the Middle East and attacks on ships around the Red Sea.
State producer Saudi Aramco increased its flagship Arab Light crude for Asia at a premium of $1.70 a barrel to the regional benchmark. That’s higher than expectations in a survey of refiners and traders last week.
OPEC+ is extending curbs on crude production to at least the end of June in a bid to avert a global surplus and shore up prices. Still, rising supply from outside the group could meet most of the additional demand forecast for this year, making it difficult for the Saudis and their partners to bring those barrels back to the market.
As the largest producer in the Organization of Petroleum Exporting Countries, Saudi Arabia is leading the group’s push to prevent a supply surplus.
The Saudis have also decided to halt an expansion of their production capacity to 13 million barrels a day and instead stick with the current level of 12 million. That raised speculation about the strength of mid-term demand for the kingdom’s oil.
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