Saudi Arabia may maintain October light crude prices for Asia: report

Saudi Arabia is expected to keep prices for light crude grades supplied to Asia largely unchanged from September, to remain competitive, Reuters reported citing trade sources.

The Kingdom has reduced prices for Arab Light and Arab Extra Light to Asia over the past two months amidst competition from other Middle Eastern suppliers, Europe, and the United States.

Three out of six respondents in a Reuters survey said they expect the October official selling price (OSP) for flagship Arab Light crude to post an increase of 5-30 cents from the previous month. The other half expects prices to fall by up to 30 cents.

Five of the respondents surveyed expect Saudi Arabia to cut the OSP for the Arab Heavy grade, in order to track a 72 percent drop in fuel oil margins last month. However, their view on Arab Medium's OSP was mixed, the agency reported.

Saudi Aramco usually releases crude OSPs around the fifth of each month. They set the trend for Iranian, Kuwaiti and Iraqi prices, affecting more than 12 million barrels per day of crude oil bound for Asia.

The state oil giant sets its crude prices based on customer recommendations and after calculating the change in the value of its oil over the past month, based on yields and product prices.