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Saudi Arabia Raises Arab Light Crude Prices for Asia for 3rd Month

A view shows branded oil tanks at the Saudi Aramco oil facility in Saudi Arabia (File photo: Reuters)
A view shows branded oil tanks at the Saudi Aramco oil facility in Saudi Arabia (File photo: Reuters)
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Saudi Arabia Raises Arab Light Crude Prices for Asia for 3rd Month

A view shows branded oil tanks at the Saudi Aramco oil facility in Saudi Arabia (File photo: Reuters)
A view shows branded oil tanks at the Saudi Aramco oil facility in Saudi Arabia (File photo: Reuters)

Saudi Arabia, the world's top oil exporter, has raised the prices of its flagship crude for Asian buyers for the third straight month, informed sources said.

The official selling price (OSP) for May-loading Arab Light to Asia was raised by 30 cents a barrel from April to $2.80 a barrel over Oman/Dubai quotes, the sourced added, according to Reuters.

Saudi Arabia also raised the OSPs for Arab Medium and Arab Heavy, crude grades that contain more sulphur than Arab Light, by 30 cents and 50 cents in May respectively.

The size of the price increase on Arab Heavy follows a stronger demand for heavier crude in the region as new refineries designed to process heavy grade, such as PetroChina's Jieyang plant, are coming online.

Meanwhile, oil prices settled largely unchanged on Wednesday as the market weighed worsening economic prospects against expectations of US crude inventory declines and plans by OPEC+ producers to reduce output.

Brent crude futures settled up 5 cents, or 0.1%, at $84.99 a barrel, while West Texas Intermediate crude ended 10 cents, or 0.1%, lower at $80.61 a barrel.

US crude inventories fell 3.7 million barrels last week, about 1.5 million barrels more than forecast, government data showed. Gasoline and distillate stocks also fell more than expected, drawing down by 4.1 million barrels and 3.6 million barrels, respectively.

"Maybe following the strong price rally this week, investors are a bit cautious on jumping on a strong report," said UBS analyst Giovanni Staunovo.

Also, prices jumped on Monday after the Organization of the Petroleum Exporting Countries and allies including Russia, collectively known as OPEC+, pledged voluntary production cuts.

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Saudi Arabia Sees Highest Level of Non-oil Private Sector Activity in 4 Months

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
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Saudi Arabia Sees Highest Level of Non-oil Private Sector Activity in 4 Months

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)

Business activity in Saudi Arabia's non-oil sector accelerated to a four-month high in September, driven by strong demand, which led to faster growth in new orders. The Riyad Bank Saudi Arabia Purchasing Managers' Index (PMI), adjusted for seasonal factors, rose to 56.3 points from 54.8 in August, marking the highest reading since May and further distancing itself from the 50.0 level that indicates growth.

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders, alongside challenges in supply. The improvement in business conditions contributed to a significant rise in employment opportunities, although difficulties in finding skilled workers led to a shortage in production capacity.

At the same time, concerns over increasing competition caused a decline in future output expectations. According to the PMI statement, inventories of production inputs remained in good condition, which encouraged some companies to reduce their purchasing efforts.

Growth was strong overall and widespread across all non-oil sectors under study. Dr. Naif Al-Ghaith, Senior Economist at Riyad Bank, said that the rise in Saudi Arabia's PMI points to a notable acceleration in the growth of the non-oil private sector, primarily driven by increased production and new orders, reflecting the sector’s expansionary activity.

Al-Ghaith added that companies responded to the rise in domestic demand, which plays a crucial role in reducing the Kingdom's reliance on oil revenues. The upward trend also indicates improved business confidence, pointing to a healthy environment for increased investment, job creation, and overall economic stability.

He emphasized that this growth in the non-oil sector is particularly important given the current context of reduced oil production and falling global oil prices. With oil revenues under pressure, the strong performance of the non-oil private sector acts as a buffer, helping mitigate the potential impact on the country's economic conditions.

Al-Ghaith continued, noting that diversifying income sources is essential to maintaining growth amid the volatility of oil markets. He explained that increased production levels not only enhance the competitiveness of Saudi companies but also encourage developments aimed at expanding the private sector's participation in the economy.

This shift, he said, provides a more stable foundation for long-term growth, making the economy less susceptible to oil price fluctuations.