Bloomberg News

Saudi Aramco Cuts September Light Crude Oil Premium to Asia

August 05, 2012

Saudi Arabian Oil Co., the world’s largest crude exporter, cut the premium used in determining official selling prices for its Light, Medium and Heavy grades to customers in Asia for September shipments while raising the premium for Light crude to customers in the U.S.

Saudi Aramco, as the producer is known, raised the differentials used to determine the prices for all grades for sale to Northwest Europe and the Mediterranean region in September, the company said in an e-mailed statement today.

Aramco set the premium for its Light crude for September loadings for U.S. buyers at 45 cents a barrel more than the Argus Sour Crude Index, 10 cents more than the differential for August cargoes. It cut the premium for Light crude to Asia by 80 cents a barrel to $1.25 more than the average of Oman and Dubai grades, benchmarks for Persian Gulf crudes.

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.

United States

Variety        API      September    August         Change
Extra Light    38.5     +1.90        +1.20          +0.70
Arab Light     32.5     +0.45        +0.35          +0.10
Arab Medium    31       -1.80        -1.60          -0.20
Arab Heavy     27       -3.50        -3.00          -0.50
 ----------------------------------------------------

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      September    August         Change
Super Light    50.6     +3.20        +2.70          +0.50
Extra Light    38.5     +2.70        +2.70           0.00
Arab Light     32.5     +1.25        +2.05          -0.80
Arab Medium    31       -0.30        +0.90          -1.20
Arab Heavy     27       -1.50        -0.30          -1.20
 ----------------------------------------------------

Prices for customers in Asia are expressed as a differential to
the average of Oman and Dubai grades, the two Arabian 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.

Northwest Europe

Variety        API      September    August         Change
Extra Light    38.5     +1.85        -0.40          +2.25
Arab Light     32.5     +0.25        -1.65          +1.90
Arab Medium    31       -1.55        -3.25          +1.70
Arab Heavy     27       -3.70        -5.50          +1.80
 ---------------------------------------------------

Mediterranean

Variety        API      September    August          Change
Extra Light    38.5     +2.40        -0.70           +3.10
Arab Light     32.5     +0.15        -2.15           +2.30
Arab Medium    31       -1.40        -3.35           +1.95
Arab Heavy     27       -3.60        -5.10           +1.50
 ---------------------------------------------------

Prices for Northwest European and Mediterranean customers are
expressed as a differential to the Brent weighted average posted
by Intercontinental Exchange, free on board Ras Tanura.

To contact the reporter on this story: Anthony DiPaola in Dubai at adipaola@bloomberg.net.

To contact the editors responsible for this story: Stephen Voss on sev@bloomberg.net.


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