Organisation of Petroleum Exporting Countries (OPEC) largest producer, Saudi Arabia, is offering extra oil on top of its contractual volumes to some buyers in its key market-Asia.
WTI traded down 3.25 per cent at $68.70, while Brent tslumped 3.40 per cent at $72.77.
The country is boosting oil production to keep markets well-supplied amid disruptions from Venezuela to Libya and expected reduction of Iranian oil exports, according Bloomberg report yesterday.
Saudi Aramco has offered for August additional cargoes of its Arab Extra Light grade to at least two customers in Asia, Bloombergโs sources say. One of those buyers who had been offered additional volumes of Arab Extra Light agreed to take them, according to one of the sources.
While it is opening the taps, Saudi Arabia also cut last week its official selling prices (OSPs) for most of its grades to the Asian markets for August, in a sign that it wants to attract more customers now that it has raised production. The OSP for the Saudi flagship Arab Light grade for Asia was reduced by $0.20 to a premium of $1.90 above the Dubai/Oman benchmark. This was the first cut in Arab Light pricing for Asia in four months and a drop from the highest OSP since July 2014.
Saudi Arabia had opened the taps even before OPEC and Russia agreed at the end of June to ease the production cuts to respond to the high oil prices and supply disruptions, judging from OPECโs Monthly Oil Market Report that showed the Saudis boosted their crude oil production in June by more than 400,000 bpd.
According to OPECโs secondary sources, the ones the cartel uses to calculate quotas and compliance, Saudi Arabiaโs oil production jumped in June by 405,400 bpd compared to May, to reach 10.420 million bpd.
Reports have it that the Saudis are preparing to pump their highest-ever crude oil volumes in July, at 10.8 million bpdโabove the current all-time high of 10.72 million bpd from November 2016, just before the OPEC+ deal entered into force.
