Oil prices increased on Monday after Saudi Arabia’s state oil company, Aramco, said it would raise the price of crude oil for its Asian customers, cementing the bullish market sentiment of “strong demand”.
International benchmark Brent crude was trading at $83.59 per barrel at 0625 GMT for a 1.02% increase after closing the previous session at $82.74 a barrel.
American benchmark West Texas Intermediate (WTI) traded at $82.22 per barrel at the same time for a 1.16% gain after it ended the previous session at $81.27 a barrel.
The 23-members of the Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, decided on Thursday that it would adhere to its production pact of 400,000 barrels per day in December, rebuffing US President Joe Biden’s demands for more oil output.
Just one day later, Aramco announced its intention to boost the official selling price of its Arab Light crude for Asian consumers from $1.40 to $2.70 per barrel. Investors interpreted this move as strengthening demand on global markets that are still subject to supply pressure.
The US is now weighing whether to tap its Strategic Petroleum Reserves (SPR).
Speaking to reporters on Saturday, Biden said the OPEC+ oil increase is insufficient to meet US demand.
“First of all, I’m not anticipating that OPEC would respond, that Russia and/or Saudi Arabia would respond,” Biden told reporters at the White House on Saturday. “They’re going to pump some more oil. Whether they pump enough oil is a different thing.”
Energy Secretary Jennifer Granholm said Friday the country is not ruling out a potential release from the SPR to cool off gasoline prices.
“The SPR is certainly on the table as an option,” Granholm said.
Investors are now awaiting industrial data on crude oil inventories in the US, the world’s largest oil-consuming country.
The American Petroleum Institute (API) will release its forecast data on US inventories on Tuesday before the oil stock data of the US Energy Information Administration on Wednesday.
Limiting further increases, China's crude oil imports fell to their lowest level since September 2018, as big state refiners held off on purchases due to rising prices, while quotas limited independent refiners.
The world's largest crude oil importer brought in 8.9 million barrels per day (bpd), according to figures from the General Administration of Customs on Sunday.
This volume is considerably lower than the 9.99 million bpd in September and 10.02 million bpd imported during the same period last year.
However, export growth in China exceeded expectations in October with a 27.1% growth rate to $300.2 billion despite global supply chain disruptions.
By Sibel Morrow