Oil spikes as Saudi Arabia raises prices for Asia 07/04/2015

Oil spikes as Saudi Arabia raises prices for Asia
07/04/2015 09:38
Crude oil futures jumped in the domestic and overseas market on Monday after Saudi Arabia, the world’s biggest oil exporter, raised prices for its Asian buyers amid an improvement in refining margins.
The most prominent crude player in the OPEC cut the discount on its main Arab light grade crude oil May sales to Asia as demand from refiners in the region improved.
State-owned Saudi Arabian Oil Co., known as Saudi Aramco, has upped official selling prices for Asia for a second straight month while the country’s Oil Minister signaled an improvement in global demand, offering a boost to crude oil prices which have been battered amid fears over a worsening global supply glut.
Investors are also betting that it may take some time for Iranian oil to return to the market even as the Islamic nation struck a preliminary nuclear accord with six global powers last week, with the deadline for the final deal being June 30. Despite the landmark nuclear accord, the pace of lifting of economic and financial sanctions against Iran is expected to be very slow to ensure compliance.
Services activity in the US continued to expand at a robust pace in March, easing concerns over a slowdown in the world’s biggest economy, lifting the demand outlook for the fuel. The ISM US Services PMI stood at 56.5 in March, a tad lower from February’s 56.9, but above the no-change mark of 50.
Investors cast aside slight signs of weakness in the US labour market as the Fed’s labour market conditions index fell to -0.3 in March from 2 in February.
Oil may extend gains today amid bets that the pace of US stockpile-build may slow while Iranian oil may make a very gradual return.
At the MCX, Crude oil futures, for the April 2015 contract, closed at Rs 3,254 per barrel, up by 7.15 per cent, after opening at Rs 3,075, against the previous close price of Rs 3,037. It touched an intraday high of Rs 3,263 till the closing.