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Saudi producers start 2017 on firm stance amidst recovery in oil markets

  • 03/01/2017 (10:05)
In Saudi Arabia, several traders reported receiving new January offers from two local producers with rollovers to increases in line with expectations. Sellers cited the recovery in the oil markets through the end of the last year as the main reason behind their firming stance despite the fact that there is no major improvement in demand given ongoing economic and political woes in the region.

Despite the minor decreases in the last two days, oil markets ended 2016 with their biggest gain since 2009, according to media reports, gaining momentum following the consensus over production cuts. Reuters reported that Brent oil futures rose 52% in 2016 while WTI crude oil climbed around 45%, posting the largest annual gains since 2009 when the futures rose 78% and 71%, respectively.

A trader said that a Saudi producer raised its homo PP raffia and injection offers by SAR113/ton ($30/ton), HDPE film and blow moulding offers by SAR19/ton ($5/ton) from December while maintaining its LLDPE film offers unchanged at last month’s levels.

Another trader operating in Egypt also said that a Saudi major revealed their new offers with hikes except for HDPE grades, which remained stable at December offers. The producer raised its January prices by SAR113/ton ($30/ton) for PP raffia, inj., fibre and film, by SAR75/ton ($20/ton) for PPRC inj. and by SAR37/ton ($10/ton) for LDPE film from the previous month. The trader confirmed that producers’ hike attempts are matching the gains in oil markets.
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