By Anthony DiPaola and Yee Kai Pin Dec 11, 2014 5:00 AM GMT+0800 Save
Kuwait is offering Asian buyers the largest discount for oil in six years, joining Saudi Arabia and Iraq in lowering prices.
Kuwait Petroleum Corp., the state-run oil company, will sell itscrude at $3.95 a barrel below the regional benchmarks next month, the company said in a faxed statement yesterday. That’s the biggest discount since December 2008, data compiled by Bloomberg show. It was $2.10 this month.
Saudi Arabia, the world’s biggest oil producer, lowered its official selling prices to Asia and the U.S. on Dec. 5 after the Organization of Petroleum Exporting Countries decided last month to maintain production. Crude is trading in a bear marketas the highest U.S. production in three decades exacerbates a global glut.
“In this situation of oversupply in crude, everyone has to defend his market share,” Gerrit Zambo, an oil trader at Bayerische Landesbank in Munich, said by telephone yesterday. “Producers are trying to sell as much oil as they can, even with low oil prices.”
Middle Eastern producers are competing with cargoes from Latin America, North Africa and Russia for buyers in Asia. They’ve lowered price differentials and maintained output, raising speculation they are seeking to defend market share.
Iraq’s discount in Asia is the biggest in at least 11 years and Saudi Arabia widened the discount on Arab Light to the most in at least 14 years.