Saudi Aramco commitments ‘not impacted by oil price moves’
ABU DHABI: A senior official at Saudi Aramco said that the recent fluctuations in oil prices would not threaten the company’s long-term supply commitments.
“The recent volatility is not new..˝.(it is) in large (part) due to a weak global economy,” Amin Nasser, senior vice president for upstream operations at Saudi Aramco, told an energy conference in Abu Dhabi, adding that there was a “significant amount of oil” in the market.
“However, long-term fundamentals remain robust…Fluctuating oil prices don’t overshadow Saudi Aramco’s long-term commitment.”
While Saudi Arabia and Gulf states have given no indication that they are in a hurry to curb crude production and shore up the market, some analysts argue that the price adjustments are simply a routine response to market conditions rather than a leading indicator of the kingdom’s thinking.
The Organization of the Petroleum Exporting Countries (OPEC) is due to meet on Nov. 27.
Saudi Aramco recently hiked the price of crude to customers in Asia and Europe in December, but deepened cuts to US buyers in a sign it may be redoubling efforts to retain its share of the world’s biggest market.
Saudi Aramco raised its December price for its Arab Light grade for Asian customers by $0.95 a barrel versus November to a discount of just $0.10 a barrel to the Oman/Dubai average, it said on Tuesday. That reversed most of the $1.20 a barrel reduction in November’s prices.
While the direction was largely in line with trader expectations based on a stronger Dubai crude market, the size of the increase to Asia was taken by some traders as a sign that Saudi Arabia may be more willing than previously thought to act to support prices.
The company raised its Arab Light OSP to Northwest Europe by 60 cents for December from the previous month at a discount of $3.35 a barrel to the Brent Weighted Average (BWAVE).
In November, Aramco had cut prices by 40 cents.
The Arab Light OSP to the US was set at a premium of $1.60 a barrel to the Argus Sour Crude Index (ASCI) for December, down 45 cents from the previous month. It was the lowest premium since 2013, according to Reuters data.