TOKYO -- Japanese oil companies are paying more to import crude, with prices of long-term contracts with Saudi Arabian producers hitting a half-year high.
Japan imports about 80% of its crude under long-term contracts from such leading oil-producing nations as Saudi Arabia. The May contract price of Arabian Light came close to $63 a barrel, up 9% from April and 40% from January.
Crude prices have been rising on the forecast that U.S. shale oil production will drop in earnest. American crude inventories stood at 479.4 million barrels as of May 22, down 2% from the previous month. A large decline in gasoline inventories in advance of the summer driving season helped drive crude oil higher.
On foreign exchange markets, the Japanese currency weakened to around 124 to the dollar. This pushed up yen-denominated Dubai crude oil futures traded on the Tokyo Commodity Exchange to more than 50,000 yen ($399) per kiloliter Monday, the highest price in a month.
Costlier crude will likely ripple to domestic gasoline prices, which through May 25 had climbed for five weeks straight.