Finance Association, May 6 (Editor: Xiao Xiang) Saudi Aramco's statement on Sunday showed that Saudi Arabia raised the official selling price (OSP) of Arabian Light Crude Oil (OSP), the flagship product sold to Asia in June. Among them, the price for Asia increased for the third month in a row. Analysts said this reflects that the country is trying to tighten supply in the oil market to prevent global oversupply.

According to a price chart seen by the industry, Saudi Arabia raised the price of its flagship Arabian light crude oil sold to Asia in June to a level of 2.90 US dollars per barrel higher than the average price of Oman/Dubai, the highest since January. This figure is 90 cents higher than last month.

In contrast, the industry media's previous survey of the six refineries predicted an average month-on-month increase of about 60 cents.

In addition to light crude oil, the price of other grades of crude oil sold to Asia also increased compared to May. The price increase of most grades of Saudi crude oil in Asia is at the top of the range expected by traders in media surveys.

Some traders have now questioned whether Asian refineries have the ability to absorb the rising cost of Saudi crude oil because the profit margin for refining in Asia in April fell by nearly 2 US dollars per barrel compared to March.

Saudi Arabia also raised the price of Arabian light crude oil sold to northwest Europe and the Mediterranean region in June to the levels of $2.10 and $2 per barrel higher than Brent crude oil, respectively, while the price sold to the US remained the same — still $4.75 per barrel higher than the Argus Sulphur Crude Oil Index (ASCI).

Saudi Arabia strives to keep oil prices rebounding on Monday

Industry insiders pointed out that the current increase in Saudi prices highlights that Saudi Arabia is still trying to keep the market supply tight at a time when the risk of conflict in the Middle East has subsided. Furthermore, this may also indicate that it is expected that demand in the oil market will be very strong this summer.

Most traders and analysts predict that OPEC and its allies will extend their production limit policy, which is likely to continue until the end of this year.

Meanwhile, due to news that Saudi Arabia is raising sales prices, international oil prices also rebounded to a certain extent during the Asian session on Monday. As of press release, Brent crude futures rose 49 cents to $83.45 per barrel, while US West Texas Intermediate crude futures rose 48 cents to $78.48 per barrel, or nearly 0.5%.

(Warren Patterson, head of commodity strategy at Dutch International Group in Singapore) said that in the face of the tightening of the spot market, the price trend in early trading on Monday was more supportive due to the increase in Saudi OSP sales prices.

Saudi Arabia's move can be said to have temporarily contained the downward trend in international oil prices. Previously, the US WTI crude oil price fell for five consecutive trading days last week. Since the peak of over 92 US dollars in the middle of last month, it has fallen by more than 10% cumulatively by more than 10%.

IG market analyst Tony Sycamor said there was news over the weekend that Israel wants to continue expanding its military operations to Rafah. This may disrupt the current cease-fire negotiations and reignite the geopolitical tension in the Middle East that seemed to be easing, and also boosted the trend of oil prices to a certain extent.

He added that since most of the oil long positions were emptied last week, there appears to be a possibility that the WTI price will rebound to $80 at the beginning of this week.

One sign that global crude oil supply may be tightening is US Baker Hughes (Baker Hughes) said in a report on Friday that US energy companies reduced the number of oil and gas rigs for the second week in a row last week, reducing the number of oil rigs by 7 to 499, the biggest weekly decline since November 2023.