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Singapore: Saudi Aramco, the world's largest state oil company, raised its official selling prices for crude shipments to the US in January, the first increase since July.
The discount for Arab Light, the most common variety exported by Saudi Arabia, narrowed to minus $6.85 a barrel from minus $11.15 a barrel in December to Saudi Aramco's benchmark price, the Dhahran-based company said in a faxed statement yesterday.
Discounts for Extra Light, Arab Medium and Arab Heavy were also reduced. Aramco raised most prices for Asian customers, while cutting them for Europe.
Oil refining profit in the US has more than doubled to $9.85 a barrel after falling to a 13-month low of $4.52 a barrel on October 22 as demand for heating oil picks up during the Northern Hemisphere winter. Saudi Arabia has boosted output, pumping nine million barrels of oil a day, Oil Minister Ali Al Naimi said last month.
Output rise
"Saudi Arabia has been raising production for the winter months,'' said Anthony Nunan, assistant general manager for risk management at Mitsubishi in Tokyo. "Peak winter demand will usually come in January and February.''
For US customers, prices for all grades were raised by $3.10 to $4.70 a barrel. Arab Extra Light's discount was cut to minus $3.90 a barrel from minus $8.60 a barrel, Arab Medium to minus $10.05 from minus $13.75 and Arab Heavy grade to minus $13.25 from minus $16.35, Aramco said in its statement.
Prices to the US are set as a discount to the West Texas Intermediate benchmark.
Saudi Aramco released its prices before the Organisation of Petroleum Exporting Countries met yesterday in Abu Dhabi to discuss output policy.
Asian customers
For Asian customers, Saudi Aramco said it raised its premiums for Arab Super Light, Extra Light and Arab Light by between 40 cents and $1.30 a barrel.
Asian prices are quoted in relation to the average of Oman and Dubai grades, the two Arabian Gulf benchmarks used by Asian oil refiners and traders. Aramco started linking its prices to the average of Oman and Dubai crudes in 1986.
Aramco raised the premium for Arab Super Light by $1.30 to $7.05 a barrel, by $1.10 to $5.35 for Extra Light and by 40 cents to $1.75 for Arab Light.
The three varieties of crude yield more naphtha, diesel and kerosene, demand for which has risen in Asia and refining margins, known as cracks have gained, Vienna-based PVM Oil Associates said in an e-mailed reply to questions.
The company widened discounts for Arab Medium by 50 cents to minus $1.85 a barrel and by $1.30 to minus $5.10 a barrel for its Arab Heavy grade.
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