Saudi Arabia cuts oil prices to Asia, WTI sheds 1%

Saudi Arabia’s state oil giant, Aramco, cuts its official selling price (OSP) of all crude grades to Asian refiner in October while it kept the rates unchanged for its European and American customers, Reuters reports, citing oil traders in Asia.

Additional details

“Aramco lowered for the first time in four months the official selling price (OSP) of Arab Light crude for delivery to Asia in October to a premium of $1.70 per barrel versus the average of DME Oman and Platts Dubai crudes, according to a company pricing document. The price differential in September was a premium of $3 per barrel, the highest since February 2020.”

The deep price cuts were likely to boost demand for Saudi crude.

"This is what Saudi wants.”

“However, chances of Saudi Arabia engaging in another price war with other producers were slim.”

Market reaction

In response to the above piece of news, WTI remains on the back foot, extending its correction from multi-month highs above $70 reached last week.

At the time of writing, WTI is hovering at $68.50, shedding 1.05% on the day.

• WTI Price Analysis: Heavy around $68.50 as 50-SMA challenges short-term support break