June 4 (Bloomberg) -- Saudi Aramco, the world's largest state oil company, will increase prices for its lightest crude oil exports for the U.S. to a record in July.

Aramco increased the price formula for Arab Extra Light exports to the U.S. in July to a premium of $2.40 a barrel above the West Texas Intermediate benchmark, compared with a discount of $1.45 in June, the Dhahran, Saudi Arabia-based company said in a faxed statement. That is the biggest ever premium.

Light crude oil is favored by U.S. refiners for its high gasoline yield compared with heavy crudes. U.S. refinery utilization rates rose 1.8 percent in the week ending May 30, according to an Energy Department report today. Crude oil stocks fell 1.5 percent, or 4.8 million barrels, to 306.8 million barrels.

``These prices are for oil which will come to the market in August and they are counting on a recovery in gasoline demand,'' said Ehsan Ul-Haq, head of research at JBC Energy in Vienna. ``Gasoline demand might pick up in the driving season.''

Prices for all crude other Saudi Arabian exports to the U.S. rose by between $1.60 and $3.20 a barrel, according to the statement.

Arab Light will be priced at a discount of $2.45 in July compared with a discount of $5.65 this month. Arab Medium exports to the U.S. in July will be at a discount of $8.30, compared with a discount of $10.45 in June and Arab Heavy grades will be priced at a discount of $13.30, compared with $14.90.

Production Increase

The middle eastern kingdom last month said it will increase oil production by 300,000 barrels a day to satisfy rising customer demand. Saudi Arabian crude accounted for about 14.5 percent of U.S. oil imports in 2007, or 1.45 million barrels a day, according to the Energy Information Administration. Only Canada imports more crude to the U.S.

In contrast to U.S. customers, refiners in Europe will pay less for Saudi Arabian crude oil shipments in July. For its Northwest European and Mediterranean customers, Aramco will lower its price differentials by between 10 cents and $1.90 a barrel, the statement said.

Mediterranean and European prices are expressed as a differential to Intercontinental Exchange's weighted average of North Sea Brent crude oil. All prices are free-on-board, where the buyer has to pay for shipping costs.

To contact the reporters on this story: Alexander Kwiatkowski in London at akwiatkowsk2@bloomberg.netNesa Subrahmaniyan in Singapore at nesas@bloomberg.net

Last Updated: June 4, 2008 12:50 EDT