Saudi Arabia soars oil prices for key Asian customers

Saudi Arabia has raised oil prices for Asian customers, which are its primary market. May supplies from state oil company Aramco will increase between 20 and 50 cents a barrel. Meanwhile, Arab Light crude will be 40 cents more expensive than in April and will cost 1.8 dollars a barrel above the benchmark, it reports. 

The price hike comes days after OPEC and its allies agreed on Thursday to increase oil output by more than two million barrels a day in three stages between May and July.

In the meantime, prices for Aramco customers in Northwest Europe will mostly remain unchanged. Arab Light crude will fall 20 cents to $2.4 a barrel below the benchmark. As far as the US is concerned, most fees will be reduced by 10 cents.

Aramco’s prices for its customers in Asia have been higher for several months than for Europe and the US. It was partly due to energy demand in these two regions, whose economies recover from the coronavirus pandemic’s effects slower. The increase in prices also reflects the kingdom’s certainty in the economic recovery of the Asian market.

Oil Prices Will See Upward Pressure, but Rambling

Even though we now know that OPEC+ member countries will increase their crude production, analysts are uncertain about what will happen to the oil prices. It is due to the European Union’s problems with vaccines and the coronavirus pandemic. However, the United States reported that it created 916,000 jobs during March. So, there are two pieces of news pressing the prices in opposite directions. Based on that, analysts believe the WTI oil prices will see upward pressure but in a very erratic way.

The Brent markets also appear similar to the WTI. According to analysts, there is a resistance at the $65 level. If it was overcome, it could send the prices to the previous uptrend line. On the other hand, the market has tremendously essential support at a level above $60. If the market went through it, the prices could move towards the $56 level. 

 In those circumstances, the market will experience a lot of erratic movements. However, in the short term, there could be some attempt to push back to highs. In any case, according to analysts, the most suitable strategy could be based on trying to take advantage of the range. At least, traders could follow a candle with significant momentum.