Saudis Raise February Crude Prices as OPEC+ Holds Back Barrels

(Bloomberg) -- Saudi Arabia raised oil prices for buyers in Asia next month, in a sign the world’s largest crude exporter may see tighter supply in its largest market after OPEC+ recently delayed plans to ramp up production.

State oil producer Saudi Aramco set the price for its main Arab Light crude grade at a premium of $1.50 a barrel to the regional benchmark for February, according to a price list seen by Bloomberg. That’s an increase of 60 cents, compared with a 10-cent hike forecast in a Bloomberg survey of traders and refiners.

Benchmark oil prices in London remain locked in a range around $75 a barrel after slipping about 3% last year as sluggish demand growth, especially in China, threatens an increase in surplus barrels. 

Traders largely shrugged off myriad geopolitical risks buffeting the Middle East last year, eroding any risk premium priced into the market. They’re now waiting to see whether the incoming administration of Donald Trump in the US pushes for higher output there or seeks to cut supply through sanctions on some countries.

Last month, the OPEC+ alliance — led by Saudi Arabia and Russia — agreed to postpone production increases planned for the start of January by another three months, following two previous delays. The prospect of an impending oversupply pushed the group to extend its output curbs into next year to avoid overwhelming the market.

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