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Saudi Aramco Cuts November Light Crude Offsets to U.S., Asia

Saudi Arabian Oil Co., the world’s largest crude exporter, cut differentials used in determining the official selling prices for its light grades to customers in Asia and the U.S. for November.

The state-owned producer, known as Saudi Aramco, reduced the monthly premium for Arab Light crude to Asia by 20 cents a barrel, to $3.20 more than the average of Oman and Dubai grades, the Persian Gulf benchmarks, it said today in an e-mailed statement. Aramco raised the premium for Arab Medium crude to Asia, by 10 cents a barrel, to $1.30 a barrel.

Buyers had expected the Light crude premium for shipments to Asia to rise by 5 cents a barrel to $3.45, according to a survey of five refiners in Japan, South Korea and India today. The increase in the Arab Medium premium met the expectations of the refiners surveyed. Refiners use the monthly prices to help forecast fuel-processing margins, a factor in deciding how much of a country’s crude they buy in successive months.

Aramco narrowed the premium for Light crude shipments to the U.S. by 20 cents a barrel, to 75 cents more than the Argus Sour Crude Index. It cut differentials for all grades to Northwest Europe and the Mediterranean region.

Sidi Kerir Prices

The differential for Arab Light from the Egyptian port of Sidi Kerir was cut by $1.15 a barrel to a discount of 75 cents a barrel to the Brent futures weighted average, or BWAVE, published by the Intercontinental Exchange, said two traders who received the notice, asking not to be identified because the information is confidential.

Prices of all four crude grades from Sidi Kerir were 55 cents more than those shipped from Ras Tanura in the Persian Gulf for customers in the Mediterranean, compared with 45 cents for this month, they said.

Persian Gulf oil producers such as Saudi Arabia sell most of their crude under long-term contracts to refiners. Most of the region’s state oil companies price their oil at a premium or discount to a benchmark.

The following table gives differentials for the regions into which Aramco sells in relation to benchmark prices, the month-on-month change and the degrees of gravity as defined by the American Petroleum Institute. Prices are in U.S. dollars a barrel.

U.S.

Variety        API      November    October     Change
Extra Light    38.5     +2.50       +3.20       -0.70
Arab Light     32.5     +0.75       +0.95       -0.20
Arab Medium    31       -1.70       -1.70        0.00
Arab Heavy     27       -3.20       -3.50       +0.30
 ----------------------------------------------------

Prices for customers in the U.S. are expressed as a differential
to the Argus Sour Crude Index published by Argus Media Ltd.

Asia

Variety        API      November    October     Change
Super Light    50.6     +6.90       +8.20       -1.30
Extra Light    38.5     +4.85       +5.45       -0.60
Arab Light     32.5     +3.20       +3.40       -0.20
Arab Medium    31       +1.30       +1.20       +0.10
Arab Heavy     27       -1.05       -1.70       +0.65
 ----------------------------------------------------

Prices for customers in Asia are expressed as a differential to
the average of Oman and Dubai grades, the two Persian Gulf
benchmarks used by Asian oil traders. The Dubai and Oman price
assessments are published by Platts, the energy-information
division of McGraw-Hill Cos.

Northwestern Europe

Variety        API      November    October     Change
Extra Light    38.5     -0.05       +1.35       -1.40
Arab Light     32.5     -1.95       -0.75       -1.20
Arab Medium    31       -3.80       -2.85       -0.95
Arab Heavy     27       -6.30       -5.80       -0.50
 ---------------------------------------------------

Mediterranean

Variety        API      November    October     Change
Extra Light    38.5     +0.75       +2.25       -1.50
Arab Light     32.5     -1.25       -0.05       -1.20
Arab Medium    31       -2.95       -2.30       -0.65
Arab Heavy     27       -5.35       -5.10       -0.25
 ---------------------------------------------------

Prices for Northwest European and Mediterranean customers are
expressed as a differential to BWAVE, free on board Ras Tanura.

Sidi Kerir
Variety        API      November       October       Change

Extra Light    38.5     +1.25          +2.70          -1.45
Arab Light     32.5     -0.75          +0.40          -1.15
Arab Medium    31       -2.45          -1.85          -0.60
Arab Heavy     27       -4.85          -4.65          -0.20

 ---------------------------------------------------
Prices for Sidi Kerir shipments are expressed as a differential
against BWAVE on a free-on-board basis.

To contact the reporters on this story: Anthony DiPaola in Dubai at adipaola@bloomberg.net; Sherry Su in London at lsu23@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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