Saudi oil price adjustments increased global supply.

Saudi Arabia, a leading member of OPEC+, recently made a sharp cut in official oil pricing in Asia, indicating a weak trend in the region's oil spot market. In particular, Saudi Aramco lowered the official selling price of Arab Light crude to its lowest since November 2021, at a regional benchmark premium of as low as $1.50 per barrel. The larger-than-expected $2 price cut reflects reduced demand from China and increased global supply.

Last year, increased production in non-OPEC+ countries led to the first annual loss in the oil market since 2020, and demand growth is expected to slow. This prompted Saudi Arabia to sharply cut its own production, along with other OPEC+ members and allies. In addition, market concerns about a possible slowdown in global economic growth in 2024 could further dampen oil consumption.

Serena Huang, chief Asia analyst at Vortexa Ltd, pointed out that Saudi Arabia's sharp cut in official selling prices was not unexpected, given the weak global economic outlook and seasonal drop in demand, and that the move was to protect its market share. The adjustment to Saudi pricing is based on spot market trends, which could boost the margins of those customers who rely on Saudi crude oil.

However, at least three Asian customers said they were unlikely to increase their orders from Saudi Arabia even if prices dropped, as there was cheaper competitive supply in the market. There were even two Chinese buyers who said they did not plan to import any scheduled goods from Saudi Arabia next month.

In addition, Chinese refiners have indicated that they will load less Saudi crude in January. Asian crude buyers have also started looking for other sources of supply after Saudi Arabia slashed its pricing of key grades by only half of expectations.

We are major at Cementing and Fracturing Equipment, Gate Valve and wellhead Christmas Tree,Plunger Pumps and Mud Pumps, Flow line Products, Solid Control Equipment,Drilling Rigs and Work over Rigs Matching Equipment etc.

High quality & Steady quantity & Most competitive price will be sent for you.

Looking forward our cooperation.