Monday, October 6, 2014

Saudi cuts official crude oil prices in battle for market share

**** Oil prices are on decline. Shale Oil boom in North America, slow transition to fuel efficient/Electric cards and more and more production of renewable energy is reducing demand of oil as predicted earlier. The biggest beneficiaries are Airline stocks like Southwest LUV, American ALL, Delta Air DAl etc
***** 
By Rania El Gamal and Reem Shamseddine
DUBAI/KHOBAR, Oct 1 (Reuters) - Saudi Aramco sharply cut official oil prices for Asian customers in November, the state-run company said on Wednesday in the clearest sign yet the world's largest exporter is trying to compete for crude market share.
The move comes amid calls from some within the Organization of the Petroleum Exporting Countries (OPEC) for action to shore up prices, as international benchmark Brent crude oil has slumped to a two-year low.
But the price cuts on Wednesday indicate Saudi is likely to follow its long-stated policy of supplying enough oil to world markets, while at the same time quietly competing with countries like Iraq and Iran to be the top supplier to fast-growing economies likeChina.

International benchmark Brent crude oilfutures reversed course after the Saudi prices were released, turning negative in late trade. At 1835 GMT they were trading down 0.45 percent at $94.25 a barrel.
"Brent is going down hard," one trader said. "It's going to retrace most of the gains from today on this."
Another trader said the fourth-straight monthly reduction made it appear Saudi Arabia may be trying to start a "price war" with rival producers. Regional oil rival Iran may face a budget deficit due to lower prices and Western sanctions.
Saudi slashed its flagship Arab Light selling price by $1 a barrel versus October to a discount of $1.05 a barrel to the Oman/Dubai average. Traders had been expecting a cut no bigger than 70 cents.
Saudi also cut prices to Europe and the United States by 40 cents a barrel.

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