Saudi Aramco and its Impact on Oil prices

Oil prices increased on Monday morning in Asia, with the supply the center of investors’ focus as Saudi Aramco raised the official selling price for its crude.

Brent oil futures gained 1.04% to $83.60 by 12:55 AM ET. West Texas Intermediate (WTI) futures jumped 1.21% to $82.25.

Last week, the company from Saudi Arabia raised its December official selling price to Asia for its Arab light crude to $2.70 a barrel versus Oman/Dubai crude. It raised the official selling price for its crude from $1.40 to $2.70.

Saudi Aramco’s move suggests “demand remains strong” after OPEC and its allies decided not to change its plan. As a result, members of OPEC and its allies will only raise oil output by 400,000 barrels per day from December.

Oil prices jumped in 2021 as the roll-out of vaccines boosted mobility and stoked energy demand. Goldman Sachs Group Inc has an interesting forecast regarding Brent. It expects that the price of global benchmark Brent will hit $90 a barrel.

Oil prices and Joe Biden

This week, Joe Biden’s administration will look at U.S. crude oil supply data provided by the American Petroleum Institute. The administration also plans to have a look at the data from the Energy Information Administration.

The situation regarding oil prices alarmed Joe Biden. U.S. President called for OPEC+ to increase supply. Nonetheless, OPEC+ is unlikely to change its position in the near future. Oil giant Saudi Aramco’s decision is also a signal that Saudi Arabia will continue to resist U.S. pressure to pump more oil. OPE+ decision raised the possibility of an SPR release, which could be made in coordination with other states.

Elsewhere, in October, China’s oil imports dropped to the lowest level in three years. State-owned refineries in China were restricted from purchases due to higher prices. Independent refiners had to deal with another issue. They faced quotas for importing crude.