Saudi Arabia has reduced its official selling prices for January Oil deliveries, with Asian customers now paying only $0.60 per barrel above the Oman/Dubai benchmark. The move, the lowest premium in five years, reflects subdued demand and may prompt other OPEC nations to lower their prices as well, Commerzbank's commodity analyst Carsten Fritsch notes.

OPEC likely to follow Saudi pricing lead

"Saudi Arabia has further reduced its official selling prices (OSPs) for Oil deliveries in January. Customers in Asia now only need to pay a premium of 60 US cents per barrel on top of the Oman/Dubai benchmark for Arab Light."

"In December, the premium was USD 1, and in November it was more than USD 2. The last time the price premium was lower than next month was five years ago, during the coronavirus pandemic."

"Back then, OSPs were even significantly negative in some cases. Saudi Arabia is apparently only able to bring the higher export volumes onto the market at reduced selling prices, which indicates that demand is subdued. The other OPEC countries are also likely to adjust their selling prices downwards in the coming days, as Saudi Arabia usually sets the tone for pricing."