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Aramco to Reduce Oil Prices in September Contracts | ASHARQ AL-AWSAT English Archive 2005 -2017
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Facilities at phases 2-3 of the South Pars gas field, owned jointly by Iran and Qatar, are illuminated at night in Assaluyeh on Iran’s Persian Gulf coast, May 27, 2006. REUTERS/Morteza Nikoubazl

Khobar- Oil refinery profits dropped in July to a record rate in three and a half years. Amid these harsh conditions in the global refining industry, forecasts showed that Aramco will be compelled to offer discounts to encourage clients to load more shipments.

Saudi Aramco has lowered the pricing terms for Arab Light sold to Asia by USD1.30 per barrel in September, before issuing an official oil prices’ statement for September. Specialized agencies often conduct surveys to get a feedback about Aramco from analysts, oil owners and traders, who are also Aramco clients.

Bloomberg is one of these agencies; it revealed in a survey released on 29 July forecasts that Aramco drop in September will be fruitful and might reach USD1 per barrel for the Arab light. Previous survey released in June revealed that Aramco is expected to drop prices of August by 25 cents; however, Aramco was more generous.

Saudi official oil prices were expected to witness a decline in August to remain competitive in a season that usually has poor demand in Asia, especially that several oil refineries will be stopped for maintenance in the third quarter of 2016.

In June, Saudi Arabia pumped and shipped more oil after completion of Shaybah oil field expansion; a step that put pressure on competitive producers.

Optimism prevails in the oil market with regards to demand and supply balance and the enhancement of prices in the second half of 2016. Despite international organizations’ optimism, oil prices’ recovery remains uncertain in the second half of 2016.