SINGAPORE (Reuters) - State oil giant Saudi Aramco has agreed to supply some customers in Asia with incremental crude that will load in January, as it holds to a strategy of maintaining market share, three sources with knowledge of the matter said on Friday.
The decision by the world’s top exporter to give extra oil came weeks before Saudi Aramco was due to notify customers of their monthly supply allocation. For January supplies, allocations would have been made only around Jan. 10.
By exercising flexibility to meet customers’ demand, Saudi Arabia is signaling that it won’t budge on market share even as it works with members of the Organization of Petroleum Exporting Countries to finalize plans for a production cut at their Nov. 30 meeting, the sources said.
“We’re going into winter so we need lighter grades,” said an official with a North Asian refiner who spoke on the condition of anonymity.
“It’s just as usual. There is no indication of a change in their behavior (in giving additional supplies),” he said.
Saudi Aramco could not be immediately reached for comment as its office is closed for weekend.
The excess Saudi supplies, combined with a rise in arbitrage inflow from Europe and the United States, have depressed Asia’s demand for similar quality light sour crude such as those from Abu Dhabi.
Aramco is selling more January Arab Extra Light crude, a second source with a North Asian refiner said.
“CPC Blend, Forties, there are a lot of replacement barrels,” he added.
Demand for Saudi Arab Extra Light crude has been robust in Asia because of its competitive pricing and its higher yield of naphtha, which is used to produce petrochemicals.
Refiners’ profits for producing naphtha are at their highest since April, Reuters data showed.
Some Asian refiners have also requested to lift more Arab Medium crude in January although Saudi Aramco has yet to commit to an increase, trade sources said.
Reporting by Florence Tan; Editing by Richard Pullin
Our Standards: The Thomson Reuters Trust Principles.