Authored by Tsvetana Paraskova by way of OilPrice.com,

On Monday, Saudi Arabia raised the official promoting value of its flagship crude going to Asia in March. The hike, which was the primary in six months, was on account of expectations of a rebound in Chinese language demand.

Saudi oil large Aramco lifted the value of its flagship Arab Mild grade to Asia for March loadings by $0.20 per barrel to a premium of $2.00 a barrel over the Dubai/Oman common, although oil costs have fallen to date this yr.

That’s the primary enhance within the official promoting costs (OSPs) for Asia since September, probably reflecting Saudi expectations that demand in Asia can be rising from the second quarter onwards.

Final month, Saudi Arabia slashed the Arab Mild value by $1.45 per barrel, setting the value for February loadings at $1.80 a barrel above the Dubai/Oman benchmark. The premium to the Dubai/Oman common for February is the bottom since November 2021, however it was typically in step with expectations.

For March, nonetheless, the rise in Saudi costs got here as a shock to the market.

“The OSP is kind of surprising. I believe it signifies that Saudi is bullish on oil demand,” a Singapore-based oil dealer instructed Reuters.

The transfer was opposite to expectations in a Reuters survey of 4 refining sources from final week, during which individuals mentioned they anticipated the value of Arab Mild to be reduce by round $0.30 for March loadings. It’s additionally towards the Bloomberg ballot, during which merchants and refiners anticipated a $0.20 reduce from Aramco for subsequent month.

For different grades, Aramco reduce the value for Arab Additional Mild by $1.30 to $2.25 a barrel over the Oman/Dubai benchmark, however raised the OSPs for Arab Medium and Arab Heavy by $0.50.