Oil up on Saudi price move

Saudi oill

Saudi oill

06 April 2015 – Oil futures climbed more than $1 a barrel on Monday, after Saudi Arabia raised prices for crude sales to Asia for a second month, signaling better demand in the region, Reuters reported.

International benchmark Brent regained ground after tumbling as much as 5% on Thursday, when a preliminary nuclear deal was finally reached between world powers and Iran, according to the news wire.

More Iranian oil could enter global markets if that is followed by a comprehensive deal by June.

But analysts warned a ramp-up in exports could take months and would likely not happen before 2016, Reuters said.

“While clearly a bearish headline, a final deal and full lifting of sanctions still faces a number of obstacles,” Morgan Stanley analysts said in a note.

“Even if a final deal is reached, we do not expect any physical market impact before 2016.”

Brent crude for May delivery touched a high of $56.19 a barrel and was up $1.19 from Thursday at $56.14 by 2.35 am EDT,” Reuters reported.

US crude for May delivery was $1.21 higher at $50.35 a barrel, after earlier touching $50.48, it said.

There was no settlement in either Brent or US crude futures on Friday as markets were closed for the start of the Easter holiday.

Despite the sanctions on Iran, China’s imports from the OPEC producer are set to rise from August as a Chinese state trader has signed a deal with the National Iranian Oil Company to buy more condensate.

The world’s top exporter Saudi Arabia kept output steady and cut its official selling prices sharply late last year in a fight for market share during a global supply glut.

Its ability to raise prices for April and May suggests its strategy is working, although competition has kept its flagship Arab Light at a discount to Oman/Dubai quotes, analysts said.

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