Saudi Oil Market Fight Shifting to U.S. as Asia Prices Increased – Bloomberg.
Saudi Arabia’s increase in crude prices for Asia signals the world’s biggest oil exporter is focusing its fight for market share on the U.S.
While Saudi Arabian Oil Co. boosted differentials for supplies to Asia next month after cutting some November prices to the lowest in almost six years, American buyers will get another month of reductions. The Middle East producer isn’t prepared to surrender sales in the U.S., where a shale boom has lifted output to the highest in more than 30 years, according to Idemitsu Kosan Co., Japan’s third-largest refiner, and Elements Capital Inc., a Tokyo-based hedge fund that focuses on energy.
Global oil prices slid into a bear market last month on speculation the biggest OPEC producers were discounting their crude to maintain market share, resisting calls to cut output amid slowing demand growth. West Texas Intermediate futures resumed the slide today, slumping to the lowest in three years, on signs the Saudis are prepared to go even lower to shore up U.S. demand.
“Asia needs to buy the crude from Saudi Arabia regardless of price fluctuations,” Ken Hasegawa, an energy trading manager at Newedge Group in Tokyo, said by phone. “On the other side of the world, they’re trying to expand their share of the U.S. market and lowered prices.”
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