Deep Oil Price Cut by Saudis Highlights Soft Physical Market
- Kingdom reduces Arab Light to the lowest premium since 2021
- Reduction was larger than expected by traders and refiners
A substantial cut in official oil pricing to Asia by OPEC+ leader Saudi Arabia has reinforced signs of softer physical market in the key region.
Saudi Aramco cut the official selling price for its flagship Arab Light crude to a $1.50-a-barrel premium to the regional benchmark for February, the lowest level since November 2021. The $2-a-barrel reduction was deeper than had been foreseen, and follows a weakening of spot differentials for Middle Eastern crudes due to lackluster Chinese appetite and increased global supplies.