Saudi Arabia raises Arab Light crude price to Asia for 2nd month in April

Top crude exporter Saudi Arabia raised prices for the flagship Arab light crude it sells to Asia for a second month in April, to $2.50 a barrel above the Oman/Dubai average, Aramco (2222.SE) said on Sunday night, Reuters reported.

The price hike – 50 cents a barrel higher than the March official selling prices – was in line with a Reuters survey, as signs of an economic rebound in China raised expectation for a pickup in fuel demand from the world’s top oil importer.

China set a modest economic growth target of around 5% for this year at its annual National People’s Congress. The world’s second-largest economy posted one of its weakest performances in decades last year when gross domestic product grew by just 3%.

Saudi Arabia set its official selling price (OSP) for Arab Heavy, a medium sour crude containing more sulphur than Arab Light, at 75 cents a barrel above the Oman/Dubai average, up $2.5 a barrel from March.

The market had been expecting a lower price setting, with the Reuters survey predicting an increase of about $1 per barrel.

The price hike came as several new refineries will soon come online, which would lead to supply tightness, especially considering Saudi’s production of Arab Heavy is smaller than other crudes, said a Singapore-based oil trader.

Heavier grades, such as Arab Medium and Arab Heavy, comprise about 30% of Saudi’s total crude oil capacity.