Bloomberg reported that Saudi Arabian heavy crude sold to Asia may be headed for its highest level in 22 months relative to benchmark Middle East grades as the kingdom capitalizes on growing demand for fuel oil. According to the median estimate of nine refiners surveyed by Bloomberg, Arab Heavy crude for November may cost USD 1.40 per barrel less than Oman and Dubai grades when prices are announced next week. That would be the smallest discount for the country's densest crude since January 2010 and compares with USD 2.15 less than the benchmark grades for October cargoes. Orders from Japan and China for fuel oil, a residue of crude refining typically used for heating and shipping are allowing state run Saudi Arabian Oil to charge more for its lowest quality grades at a time when oil prices are falling. Brent crude, the benchmark for two thirds of the world's oil, dropped 16% from this year's peak on speculation that US and Europe consumption will weaken. Returns from producing Asian fuel oil, so called crack spreads were at their strongest in 13 months on September 23rd 2011. Mr Ehsan Ul Haq senior market analyst with KBC Energy Economics in Walton on Thames said that "Fuel oil cracks have been strengthening. Strong fuel oil cracks mean Saudi Arabia would have to increase prices for heavier grades."

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