The release of the March Official Selling Prices begins to illustrate Saudi Arabia's complex and calculated moves in the global oil markets.
After years of trying to figure out the market dynamics of the brave new world with US shale and testing market responses to various signals, it knows that cutting its own production is not the only thing that matters (not to mentioned damaging to its own market share).
In fact, targeting data points that are strongly followed by the markets is more important, even if the signals they give are only superficial.
In March, Saudi Arabia increased its Official Selling Prices, pricing out its usual Asian buyers despite a market that is awash with light crude. However this is important in paving the way for more visible Atlantic Basin crudes (North Sea and West African) to be cleared,
In the first quarter, EIA data also shows that Saudi Arabia exported no barrels to its Motiva refinery in Port Arthur, USA, helping to manage storage levels in the US Gulf Coast and Caribbean, data from which drive global price sentiment.
Over the same time period, Saudi domestic inventory levels appear to have been rising.
