According to a new price list issued on Friday, the state-run oil corporation of Saudi Arabia has lowered its October pricing for its Arab Light crude oil for Asian consumers.
According to the price list, Saudi Aramco has reduced the price of its Arab Light crude oil by seventy-cents.
The announcement coincides with a further decrease in Brent oil prices, which were trading at $71.49 per barrel, the lowest level in years and a decline of $1.20 per barrel (-1.65%) for the day.
Additionally, Arab Light's price to the US and Europe has been reduced by Saudi Aramco.
Given that Official Selling Prices for Asia are currently at their lowest points in three years due mostly to weak industrial activity in China, the oil company's forecast for Asian demand is not good, especially given the recent price drop to Asia, which is Saudi Aramco's primary market.
Nevertheless, refiners upped their output to satisfy seasonal demand, and China's imports of crude oil did grow in August.
Saudi Aramco's action comes in the wake of Bank of America's revised pricing projections for the upcoming year, which saw a reduction in Brent's price from $80 to $75 per barrel. The bank reduced its WTI pricing projection from $75 per barrel to $71.
The decision by OPEC+ earlier this week to postpone its production quota rollbacks, which were originally set to take effect, is also probably due to the weak Asian demand.
take place in October. The existing production quota levels would be maintained for a further two months under a new agreement from OPEC+, which was probably negotiated vigorously with Saudi Arabia leading the delay.
Although the two-month postponement hasn't looked to have done much better, Citigroup had warned that if OPEC+ followed through on its intentions to bring supply back into the oil market, Brent might fall below $70 per barrel.
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