Aramco in Saudi Arabia increases Asia, US oil prices indicate increased demand

Saudi Arabia raised oil prices for buyers in Asia and the United States for September, a sign that the world’s largest crude exporter sees demand continue to recover despite an increase in coronavirus cases in some of the major energy importers from the world.

OPEC +, the Saudi-Russian-led group of oil producers, agreed last month to increase production for the remainder of the year. Most analysts still see the market facing a barrel shortage amid a global economic recovery from the worst of the pandemic.

Saudi Aramco will increase its key Arab Light grade for Asia by 30 cents from August to $ 3 a barrel above the state-owned company’s benchmark, according to a statement. That’s slightly less than the 50-cent increase predicted in a Bloomberg poll. Aramco increases the prices of other grades in the region by 20 to 60 cents.

Saudi Arabia sends more than 60% of its crude exports to Asia, with China, South Korea, Japan and India being the biggest buyers.

Brent crude fell 5% this week to just over $ 72 a barrel amid concerns over the spread of the delta variant of the coronavirus, particularly in Asia. This could temper the absorption of Saudi barrels by buyers, even with a smaller-than-expected increase. Abu Dhabi also increased September prices for the region.

Still, many analysts and traders see the latest outbreaks of Covid-19 as a short-term blow to demand for oil. The market has tightened this year – Brent is up around 40% despite falling this week – due to rising consumption and OPEC + only slowly easing steep supply cuts started at the beginning of last year to raise prices.

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