Saudi Arabia may raise Oct Arab Light price to 10-month high

Saudi Arabia may raise Oct Arab Light price to 10-month high

SINGAPORE - Saudi Arabia may raise prices of all crude grades it sells to Asia in October as the world's top oil exporter is expected to extend its voluntary output cut for a third month, keeping sour crude supply tight and prices elevated.

The October official selling price (OSP) for flagship Arab Light crude could increase by about 45 cents a barrel from the previous month, according to five refining sources surveyed by Reuters, which would be the grade's highest price so far this year.

Market participants and analysts expect Saudi Arabia to extend an unilateral voluntary production cut of 1 million barrels per day (bpd) to October as the kingdom targets drawing down global inventories further.

Middle East benchmarks have been strengthening since June on supply tightness worries and resilient oil demand.

Dubai's monthly change in first- and third-month price spread has averaged $2.05 a barrel this month, compared to $1.57 a barrel in July, reflecting a deepened backwardation and tighter supply in the near term.

Respondents also expect state oil giant Saudi Aramco to increase the prices of other grades on forecasts of stronger demand as most Asian refiners are seen resuming production in the fourth quarter after maintenance.

"All the price assessments are