Saudi Arabia, the world’s largest crude exporter, cut pricing for November oil sales to Asia and Northwest Europe and for most grades to other regions amid a global supply glut.
State-owned Saudi Arabian Oil Co., known as Saudi Aramco, lowered its official pricing for Arab Light crude to Asia by 25 cents a barrel to 45 cents less than the regional benchmark, it said Wednesday in an e-mailed statement, Bloomberg reported.
The company had been expected to widen the discount for shipments of Arab Light by 30 cents a barrel, to 50 cents less than the benchmark for buyers in Asia, according to the median estimate in a Bloomberg survey of six refiners and traders.
OPEC agreed last week to trim oil production for the first time in eight years after prices dropped to about half their levels in 2014.
The decision meant the group abandoned a two-year-old, Saudi-led policy of letting members pump as much as possible to push higher-cost producers out of the market.
That policy has contributed to a global supply glut, with output from Organization of Petroleum Exporting Countries reaching record highs.
OPEC's tentative agreement has sent prices to multi-month highs. However some analysts say that the strategy, if implemented, may backfire because if the price of oil climbs by as much as $10 a barrel, then that will encourage non-OPEC producers to get back in the game.
"The excess will continue to weigh on prices," JBC Energy GmbH said in a note.
Crude supplies may exceed demand by 2 million barrels a day in October as seasonal autumn refinery maintenance curbs demand, the Vienna-based consultant said.
“We see a strong likelihood of increased pressure on prices over the next month,” JBC said.
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