Saudi Arabia has once again reduced the price of crude oil it sells to Asia, with the premium for the flagship Arab Light at $2.20 a barrel over the Dubai/Oman benchmark for cargos to be delivered in October.
The price cut amounts to $1 per barrel from September, which was above analyst expectations of a smaller cut between $0.40 and $0.70, Reuters reported. The prices of other Saudi grades were also cut for October, by between $0.90 and $1 per barrel.
According to oil traders active in the Middle East and Asia, the price cut reflected expectations of softer demand in Riyadh, Bloomberg reported, noting oil prices had remained largely unchanged from Monday earlier today.
The focus of traders’ attention when it comes to the Asian oil market is, of course, China. Signals from China have been kind o conflicting this year. On the one hand, after a slow start to the year, China began boosting its crude oil imports in March-April and has kept elevated import levels since then. The key driver has been crude stockpiling, not a major rebound in demand, according to analysts.
On the other hand, forecasts of a peak in oil demand growth for the world’s biggest importer have multiplied recently. The latest comes from a state oil research company that predicted peak oil demand in China in 2027, with demand only rising by 100,000 barrels daily this year. Per Reuters, which covered the prediction without naming the company, demand will be sapped by a combination of EV sales and LNG trucks.
The research firm expected EVs to displace some 25 million tons of gasoline this year, equal to about 580,000 barrels daily, at least. However, the latest update about EV sales shows a significant slowdown, with August sales growth in EVs and hybrids together slowing down to 7.5% on the year, from a 12% annual increase a month earlier.
By Irina Slav for Oilprice.com
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