Saudi Arabia, the world’s largest crude exporter, increased the pricing terms for Arab Light sold to Asia by the most in three years as demand improved. State-owned Saudi Arabian Oil Co. said Tuesday it will sell cargoes of Arab Light in April at 90 cents a barrel below Asia’s regional benchmark. That narrows the discount by $1.40 from March, the biggest price increase since January 2012, according to data compiled by Bloomberg. The company also raised prices it offers to refiners in the U.S.
“We expected an increase, but the degree of increase is on the higher side of expectations,” Eugene Lindell, a senior analyst at JBC Energy GmbH in Vienna, said Tuesday by phone. “The Asian market is a little bit stronger compared to the last months,” and Aramco’s adjustments reflect that strength.
Three months after Saudi Arabia made clear it would defend market share against rising U.S. production rather than cut output to support prices, the strategy is showing signs of working, according to analysts from banks including Standard Chartered Plc and Bank of America Corp. Oil producers outside the Organization of Petroleum Exporting Countries are curbing investment and idling drilling rigs. Demand is growing and the market is calm, Saudi Oil Minister Ali Al-Naimi said Feb. 25.
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