Saudi Arabia raises Asia-bound flagship crude oil prices for the third month in a row

Despite the tension between Iran and Israel, the outlook for oil seems to be darkening amid concerns over China’s economy, and ample crude supplies from non-OPEC countries such as the US. There are also signs of weakening demand for diesel, a fuel that’s considered a barometer for economic activity.

The higher-than-expected price increase for Asia, the biggest importing region, is likely to crimp refining margins that are slightly above the five-year seasonal average. A sharp drop in returns from making diesel has already prompted some refiners in South Korea to make modest cuts to operating rates.

Customers in Europe also saw big increases in the kingdom’s prices for June sales, while rates for the US were largely steady.

OPEC pumped 26.81 million barrels a day in April, about 50,000 a day less than the previous month, according to a Bloomberg survey. As a result, supply curbs agreed by the group and its allies at the start of the year to avert a surplus are still unfinished. Iraq and the United Arab Emirates continue to pump several hundred thousand barrels a day above their agreed limits.