Saudi Arabia, the world’s largest crude exporter, cut pricing for March oil sales to Asia, a sign that the desert kingdom is continuing to fight for market share. Saudi Arabian Oil Co. lowered its official selling price for Arab Light crude by 90 cents to $2.30 a barrel less than Middle East benchmarks, the company said in an e-mailed statement. That’s the lowest in at least the 14 years.
“This is further evidence that they are hell bent on protecting their market share in China,” Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis, which oversees $2.4 billion, said. “They are trying to stay competitive in what is the biggest area of growth.” Middle Eastern producers are increasingly competing with cargoes from Latin America, Africa and Russia for buyers in Asia. China was the world’s second-biggest crude consumer after the U.S. in 2014, according to International Energy Agency data.
Oil prices have collapsed since the Organization of Petroleum Exporting Countries decided to maintain its output target on Nov. 27, fanning speculation that Saudi Arabia and other members were determined to let North American shale drillers and other producers share the burden of reducing an oversupply.
Brent crude, the benchmark for more than half of the world’s oil, rose as much as $2.31 a barrel, or 4.1 per cent, to $58.88 on the London-based ICE Futures Europe exchange and traded at $58. West Texas Intermediate, the U.S. benchmark, advanced as much as $2.18 to $52.66 a barrel on the New York Mercantile Exchange.