Saudi output cuts help drive up one corner of global oil market

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The increases have jumped as oil refiners in China, Europe and the U.S. bid up dwindling supplies from sanctions on Russia and Saudi Arabia’s cutbacks

Prices for sour crude oil have climbed globally this month after top exporter Saudi Arabia hiked prices and expanded production cuts of higher-sulfur oil in the first sign its efforts to prop up global prices is having an impact.

The increases – seen among North Sea, U.S. and Canadian sour crude grades – have jumped as oil refiners in China, Europe and the U.S. bid up dwindling supplies from sanctions on Russia and Saudi Arabia’s cutbacks, according to traders and brokers. But sour prices are no longer cheap. Norway’s medium sour Johan Sverdrup crude climbed on Friday to a record $3.50 per barrel premium to dated Brent, according to traders, compared with a more than $6 discount in December.

Western Canadian Select heavy crude, another widely discounted sour grade, traded at the U.S. Gulf Coast on Monday at a $2.30 per barrel discount, compared with a more than $8 per barrel discount as recently as March, according to brokerage CalRock.

 

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