Saudi Arabia raised its crude oil prices to Asia for the fourth month in a row, indicating a tightening market after the kingdom again extended a voluntary unilateral supply cut.
State-owned Saudi Aramco raised the price of its key Arab Light crude to Asia in October by 10 cents to $3.60 a barrel above the benchmark price level, the highest level since December, according to a price list seen by Bloomberg. The increase was less than expectations in a Bloomberg poll of a 30 cent rise.
The move comes after Saudi Arabia said this week that it would extend supply cuts until December. Maintaining a production level of about 9 million barrels per day, which is the lowest level in several years. Russia, the Kingdom's OPEC+ partner, also agreed to extend export restrictions until the end of the year.
Aramco also raised official prices for the United States by 20 cents while reducing prices for northwestern Europe and the Mediterranean by 10 cents, according to the price list.
The global oil market has witnessed significant tightening since the Kingdom introduced unilateral cuts in July. Sulphurous crude prices, which account for the majority of supply cuts, have risen increasingly. The Kingdom's crude customers, especially those in Europe, have been forced to scramble for alternatives, with many now switching to light or low-sulphur oil.
Brent crude futures rose above $90 per barrel. Oil options traders are showing more confidence that prices will head towards $100, even as doubts remain about China's economic outlook.
