Saudi Arabia cuts February crude prices to Asia to 3-month low

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Flames are seen at the production facility of Saudi Aramco's Shaybah oilfield in the Empty Quarter
FILE PHOTO: Flames are seen at the production facility of Saudi Aramco's Shaybah oilfield in the Empty Quarter, Saudi Arabia May 22, 2018. REUTERS/Ahmed Jadallah/File Photo
  • Prices for all crude grades to Asia drop at least $1/bbl
  • Price cuts not deep enough - trade sources
  • Aramco cuts prices to NW Europe, unchanged to the U.S.

SINGAPORE, Jan 6 (Reuters) - The world's top oil exporter, Saudi Arabia, has cut February's official selling price (OSP) to Asia for its Arab light crude to plus $2.20 a barrel versus Oman/Dubai crude.

The February OSP to Asia for the Arab light grade is the lowest in three months.

State oil giant Saudi Aramco (2222.SE) on Thursday set the February OSP for Arab Light crude to Asia $1.10 lower than the previous month, confirming what sources told Reuters earlier.

The company set the Arab Light OSP to Northwestern Europe at a discount of $1.80 a barrel versus ICE Brent, compared with minus $1.30 per barrel in January.

The OSP to the United States was set at plus $2.15 per barrel over ASCI (Argus Sour Crude Index), unchanged from the prior month.

Saudi Aramco had been expected to make deep price cuts for February after Middle East benchmarks and spot prices slumped last month. read more

However, the sources said the price cuts were still smaller than industry expectations.

For example, the OSP for Arab Light was expected to have fallen by at least $1.30 a barrel, a Reuters survey showed.

Saudi term crude supplies to Asia are priced as a differential to the Oman/Dubai average:

ASIA

UNITED STATES (versus ASCI)

Prices at Ras Tanura destined for Northwest Europe are set against ICE Brent:

NW EUROPE

Prices at Ras Tanura for Saudi oil destined for the Mediterranean are set against ICE Brent:

MEDITERRANEAN

Reporting by Florence Tan and Bharat Govind Gautam in Bangalore Editing by David Goodman, Alexandra Hudson

Our Standards: The Thomson Reuters Trust Principles.

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