* Saudi cuts light crude prices to Asia by more than expected

* Aug Arab Extra Light price drop biggest in 9 months

* Likely to intensify competition with Russia, UAE

(Adds quotes, milestone, changes date)

By Florence Tan and Josephine Mason

SINGAPORE/NEW YORK, July 1 (Reuters) - Saudi Arabia has cut August prices of the light crude oil grades it sells to Asia, with that for Arab Extra Light dropping by the most in nine months, in a bid to spur demand for the additional volumes being pumped from an expanded field.

Coming before refiners in Asia head in to their maintenance season, the price cuts by the world's top oil exporter are an attempt to ensure buyers lift more light crude, mainly Arab Extra Light - additional 250,000 barrels-per-day of which are set to be pumped from the kingdom's Shaybah oilfield in July.

Saudi Arabia's move to lower the official selling price (OSP) will intensify competition with rivals such as Russia and the United Arab Emirates, who produce similar oil grades and are also looking for a bigger share of the market in Asia, the world's top oil consuming region.

"They're more proactively marketing Arab Extra Light and that will definitely put pressure on ADNOC (Abu Dhabi National Oil Company)," a trader with a North Asian refiner said.

Saudi Aramco on Thursday slashed the August OSP for Arab Extra Light crude by 90 cents a barrel from July, the biggest drop in nine months. This was nearly double traders' expectation for a 30-50 cents cut.

The state oil giant lowered the August OSP for Arab Light by 40 cents, slightly more than traders' forecasts of 25-30 cents but in line with an earlier Reuters report.

Saudi OSPs could hurt rival light grades like UAE's Murban during what is expected to be a season for weak demand in Asia as several refineries shut for maintenance in the third quarter.

Already, a near doubling of Asia's crude benchmark Dubai from the first quarter has hit refining margins.

Profits for gasoline and naphtha at Singapore are near five-year lows, weighing on values of light crude that yield more of these fuels.

In fact, Murban cargoes loading in August have been sold at discounts against their OSP.

Outside Asia, Aramco hiked the Arab light price to Northwest Europe by 30 cents a barrel versus July to a discount of $4.50 a barrel to the Brent Weighted Average (BWAVE).

The Arab Light OSP to the United States was set at a premium of $0.45 a barrel to the Argus Sour Crude Index (ASCI) for August, down 10 cents a barrel from the previous month.

Saudi term crude supplies to the United States are priced as a differential to the ASCI. United States

AUGUST JULY CHANGE EXTRA LIGHT +1.70 +2.10 -0.40 LIGHT +0.45 +0.55 -0.10 MEDIUM -1.15 -1.05 -0.10 HEAVY -1.65 -1.55 -0.10 Prices at Ras Tanura destined for Northwest Europe are set against BWAVE: NW EUROPE

AUGUST JULY CHANGE EXTRA LIGHT -2.55 -2.55 0.00 LIGHT -4.50 -4.80 +0.30 MEDIUM -5.95 -6.45 +0.50 HEAVY -7.95 -8.60 +0.65 Saudi term crude supplies to Asia are priced as a differential to the Oman/Dubai average:

ASIA

AUGUST JULY CHANGE SUPER LIGHT +3.35 +4.05 -0.70 EXTRA LIGHT +1.70 +2.60 -0.90 LIGHT +0.20 +0.60 -0.40 MEDIUM -1.20 -1.00 -0.20 HEAVY -2.80 -2.65 -0.15 Prices at Ras Tanura for Saudi oil destined for the Mediterranean are set against the BWAVE: MEDITERRANEAN

AUGUST JULY CHANGE EXTRA LIGHT -2.60 -1.80 -0.80 LIGHT -4.50 -4.05 -0.45 MEDIUM -5.90 -5.70 -0.20 HEAVY -7.20 -7.20 0.00



(Reporting by Josephine Mason, Reem Shamseddine and Florence Tan; Editing by Susan Fenton and Himani Sarkar) ((Josephine.Mason@thomsonreuters.com; +1 646 223 8925; Reuters Messaging: josephine.mason.reuters.com@reuters.net))