Oil prices rose on Monday after Saudi Arabia’s state-owned oil producer Aramco raised the official selling price for its crude, suggesting demand remains strong at a time of tighter supplies.
Brent crude was up by 90 cents or 1.1% at $83.64 a barrel, after dropping nearly 2% last week.
U.S. oil gained 87 cents or 1.1% to $82.14, having declined almost 3% through Friday.
Aramco late on Friday raised its December official selling price to Asia for its Arab Light crude to $2.70 a barrel versus Oman/Dubai crude, up to $1.40 from this month.
The move by Aramco suggests “demand remains strong” as the OPEC producer and other major oil exporters keep the reins on supply, ANZ Research said in a note.
The Organization of the Petroleum Exporting Countries and allies such as Russia, together known as OPEC+, agreed last week to stick to their plan to raise oil output by 400,000 barrels per day from December.
Oil’s rally to a seven-year high last month alarmed U.S. President Joe Biden who led calls from consumers last week for the Organization of Petroleum Exporting Countries and its allies to step up the pace they are reactivating the supply shuttered at the start of the pandemic. Despite his plea, the alliance chose to stick with a planned, modest hike of 400,000 barrels a day. That’s raised the possibility of an SPR release, which could be made in coordination with other states.
A day after OPEC+ ignored Biden’s call to speed up the pace of output increases, Saudi Arabia raised its official crude prices for all buyers. That move is a signal the country will continue to resist U.S. pressure to pump faster, said Mike Muller, the head of Asia for Vitol. Despite the hike, Asian buyers will probably take their full contractual volumes, traders said.
Elsewhere, China’s oil imports slumped in October to the lowest in three years, as state-owned refiners withheld purchases due to higher prices, while independent refiners were restrained by limited quotas for bringing in crude
