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Despite the sharp increase in Saudi crude oil prices, Asian buyers still accept it all.
Global energy demand has skyrocketed, and oil-producing countries do not increase production but only increase prices.
Even if Saudi Arabia pushes up oil prices, due to strong demand and increased profits, Asian buyers may accept all Saudi crude oil contracts next month.
The trader said:
“Despite the previous call for OPEC+ to increase production, the organization ignored it. OPEC+ estimates that global oil supply will be tighter in the fourth quarter, and the United States calls for increasing production as much as possible. After OPEC+ insisted on its original plan to slowly increase crude oil production, Saudi Aramco (Saudi Arabian National Petroleum Corporation) ) Crude oil exported to Asia in December will all rise to prices much higher than expected. As the demand for crude oil, especially light crude oil, is very strong, Asian buyers are likely to accept it all.”
Due to the gradual recovery of the Asian economy and the energy crisis, the demand for crude oil for heating and power generation has become more tight, and the profits of refiners have continued to soar in the past few months. The profits of gasoline and naphtha have risen most obviously, followed by diesel. The high profit of sweet crude oil has attracted more crude oil producers to produce this crude oil.
The current spot crude oil market very closely reflects this view. This month, the premium of light crude oil Murban relative to Dubai crude oil rose to 5 US dollars per barrel. Russia’s Sokol and ESPO spot natural gas also experienced varying degrees of premiums in October.
Saudi Aramco raised its exports of Arabian extra light crude oil to Asia in December by US$2.2 to US$4, which is higher than the Oman-Dubai crude oil benchmark. This has become the second largest increase in the past 20 years. The largest increase will occur briefly in 2020. In the crude oil price war, it was as high as $6.7. The market price of Arabian light crude oil has also risen by 1.4 US dollars, while the previous foreign media survey predicted an increase of 0.88 US dollars.
The trader said:
“Saudi Aramco’s light crude oil exports to Asia have risen so much. One of the reasons is that the price of light crude oil in the United States, Europe and West Africa is still relatively high. However, sour crude oil such as Mars crude oil in the United States is still possible. There is a market.”
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Editor in charge: Guo Mingyu
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