Saudi Aramco lowest prices on heavy crude

Saudi Arabia’s state oil company, Saudi Aramco, lowered its selling price on crude oil to the US, Europe, and Asia on Tuesday, with the largest price cuts coming on its heaviest, most difficult to refine oil.

The price on Arab Heavy was lowered by $2.75 per barrel to Europe and by $2.25 per barrel to the US.

This drop in prices will likely lead to an increase in production by the Saudis. It comes before a meeting of the Organization of Oil Exporting Countries later this month when it is believed that Saudi Arabia will argue for an increase in the current OPEC production quota of 28 million barrels per day in a move to slow down the rise of oil prices.

Meanwhile, refiners have until Friday afternoon to make bids for 30 million barrels of crude oil the US government has made available from its emergency inventory. The base price for the bids is $61.66 for sour crude and $68.67 per barrel for sweet crude.

The price of oil and gasoline futures declined on Tuesday even though over two-thirds of the US Gulf of Mexico oil production facilities remain closed.

October delivery West Texas Intermediate crude on the New York Mercantile Exchange lost $1.67 to $65.90 per barrel, while October contracts for Brent crude on the International Petroleum Exchange were down by 19 cents to $64.66 per barrel.

Nymex gasoline futures for October lost 6.6 cents to $2.1177 per gallon, and October heating oil declined by 1.21 cents to $2.0790 per gallon.