YPF Said to Cut Oil Price in First Step to Close Gap With Brentby
YPF says average price on all crude grades is $69 a barrel
Any move to `remove distortions' seen positive: analyst
Argentina’s YPF SA has cut the price paid to producers of light crude in one of the first signs of closing a gap between high domestic and lower international prices, according to officials from two companies that sell their oil to YPF refineries.
The country’s largest refiner is paying $75 a barrel for Medanito, a light crude produced in the Neuquen basin, down from $77 earlier this year, said the officials, who asked not to be named as domestic market prices aren’t public. While the government has set caps on local prices, state-owned YPF establishes a benchmark since it has the largest refining market share.
As part of the country’s efforts to boost energy output, maintain investments and protect jobs, President Cristina Fernandez de Kirchner’s government has set a domestic oil price about 65 percent above international levels while also allowing costs at the pump for consumers to rise steadily to finance part of the difference. YPF, which was expropriated from Spain’s Repsol SA in 2012, declined to provide the exact price paid for Medanito and a heavier grade crude known as Escalante.
“YPF, in accordance with the current agreement, is receiving an average $69 a barrel between Medanito and Escalante,” the company said in an e-mail.
Brent, the benchmark for most global oil contracts, rose 5.4 percent to $51.92 a barrel in London on Tuesday, the highest settlement since Aug. 31.
YPF’s American depositary receipts rose as much as 12 percent and closed 6.9 percent higher at $17.71 in New York.
“Any move to remove distortions in the market is a positive," Michael Roche, a strategist at Seaport Global Holdings LLC, said by e-mail.