July 6 (Bloomberg) -- Saudi Aramco, the world's largest state oil company, cut its official selling prices for light crude shipments to the U.S. in August.

Aramco reduced the price of Extra Light crude by $2.30 to a premium of 10 cents a barrel above the West Texas Intermediate benchmark, compared with $2.40 in July, the Dhahran, Saudi Arabia-based company said today in a faxed statement.

Aramco also cut the price of its Arab Light crude by 55 cents to a discount of $3 a barrel to the U.S. benchmark, the company said. Light crude oil is favored by U.S. refiners for its high gasoline yield compared with heavy crude.

The company narrowed its discounts for Arab Medium and Arab Heavy by 90 cents to $7.40 a barrel and by $2.20 to $11.10 a barrel. Aramco increased most of its crude prices to Europe, while cutting prices to Asian and the Mediterranean customers.

Saudi Arabia plans to raise crude production to a 9.7 million barrels a day in July, its third monthly increase. Analysts including the London-based Centre for Global Energy Studies have said the kingdom may need to lower its prices to find sufficient buyers.

Aramco will supply customers in Asia, Europe and the U.S. with full volumes of crude oil they had requested under their monthly loading programs this month, refinery officials said on June 12.

The country supplies crudes of different quality, with Arab Extra Light fetching about $12.50 a barrel more than Arab Heavy for July sales to Europe. The prices for its various grades are set each month at a premium or discount to regional benchmark prices. Heavier crudes produce lower-value products.

To contact the reporter on this story: Shaji Mathew in Dubai at shajimathew@bloomberg.netNesa Subrahmaniyan in Singapore at nesas@bloomberg.net

Last Updated: July 6, 2008 07:23 EDT