Saudi Arabia cuts December oil prices for Asia as OPEC+ boosts output

Saudi Arabia, the world’s top oil exporter, has sharply reduced the prices of its crude for Asian buyers in December, responding to a well-supplied market as OPEC+ producers ramp up production.

State oil giant Saudi Aramco set its December official selling price at $1 per barrel above the Oman/Dubai average, marking the first price reduction since October after it kept rates unchanged in November.

The December prices for other grades - Arab Medium and Arab Heavy - fell by $1.40 each to five cents and 10 cents a barrel, while that for Arab Extra Light dropped by $1.20 to $1.30 a barrel, the document said.

The pricing decision came shortly after the Organization of the Petroleum Exporting Countries and its allies, or OPEC+, agreed on Sunday to a modest oil output increase for December, followed by a pause in production hikes during the first quarter of next year.

The producers’ alliance opted to moderate its push to reclaim market share amid growing concerns over a potential global supply glut.

OPEC+ has raised output targets by around 2.9 million barrels per day, or about 2.7% of global supply, since April, but slowed the pace from October amid predictions of a looming oversupply.

The price cuts are within market expectations, according to a Reuters survey.

Saudi Aramco determines its crude oil prices by incorporating feedback from customers and assessing monthly changes in the value of its oil, which are influenced by product prices and market yields.