Bloomberg News

Aramco Increases December Light Crude Premiums for Asia

November 04, 2012

Saudi Arabian Oil Co., the world’s largest crude exporter, raised premiums used in determining official selling prices for December shipments of light grades to Asia, it said.

The state-owned producer, known as Saudi Aramco, also increased the differentials for Arab Medium and Arab Heavy crudes to buyers in the U.S. and raised them for all grades for buyers in Northwest Europe and the Mediterranean, the company said yesterday in an e-mailed statement. Differentials for light grades shipped to the U.S. and on medium and heavy crudes to Asia will be lower in December than they were for November.

The premium for Arab Light crude to Asia increased by 20 cents a barrel to $2.95 more than the average of the Oman and Dubai grades, the Gulf benchmarks used by traders in Asia, the person said. Aramco cut the differential for U.S. buyers of Arab Light to 75 cents a barrel more than the Argus Sour Crude Index, 50 cents lower than the level set for November.

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.

United States

Variety        API      December     November       Change
Extra Light    38.5     +2.60        +3.50          -0.90
Arab Light     32.5     +0.75        +1.25          -0.50
Arab Medium    31       -1.50        -1.60          +0.10
Arab Heavy     27       -3.00        -3.80          +0.80
 ----------------------------------------------------

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      December     November       Change
Super Light    50.6     +8.05        +6.55          +1.50
Extra Light    38.5     +5.65        +4.90          +0.75
Arab Light     32.5     +2.95        +2.75          +0.20
Arab Medium    31       +0.55        +0.65          -0.10
Arab Heavy     27       -1.55        -1.10          -0.45
 ----------------------------------------------------

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      December     November       Change
Extra Light    38.5     +2.10        +0.75          +1.35
Arab Light     32.5     -0.20        -1.75          +1.55
Arab Medium    31       -2.60        -3.95          +1.35
Arab Heavy     27       -5.20        -6.50          +1.30
 ---------------------------------------------------

Mediterranean

Variety        API      December     November        Change
Extra Light    38.5     +1.65        +0.60           +1.05
Arab Light     32.5     -0.55        -1.35           +0.80
Arab Medium    31       -2.85        -3.50           +0.65
Arab Heavy     27       -5.25        -6.05           +0.80
 ---------------------------------------------------

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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