Brent crude fell 1.1% to $77.90 a barrel, while U.S. crude oil futures WTI fell 1.1% to $72.96 a barrel.
“Saudi Aramco’s cut to its February OSP adds to speculation about weak demand,” said Vandana Hari, founder of oil market research firm Vanda Insights.
Rising supply and competition from rival producers prompted Saudi Arabia on Sunday to cut the February official selling price (OSP) of its flagship Arab Light crude for shipments to Asia to its lowest level in 27 months.
Both Brent and WTI rose more than 2% in the first week of 2024 after investors returned from holidays to focus on geopolitical risks in the Middle East following Yemen’s Houthi attacks on ships in the Red Sea.
US Secretary of State Antony Blinken, who is in the Middle East this week, said the conflict in Gaza could spread throughout the region unless concerted peace efforts are made.
Israeli Prime Minister Benjamin Netanyahu has vowed to continue the war until Hamas is eliminated.
Offsetting upward pressure on prices caused by geopolitical concerns, Organization of the Petroleum Exporting Countries (OPEC) production rose by 70,000 barrels per day in December to 27.88 million barrels per day, a Reuters study showed.
“Red Sea tensions provide the only counterbalance, albeit relatively weak and intermittent, to crude oil prices, which are being driven lower by expectations of softening global demand and rising inventories,” said Vanda Insights’ Hari.
Oil prices and impact on Ukraine
Oil prices for 2023 fell by 10%, which was the first decline in two years. Oil fell after geopolitical concerns, production cuts and global measures to curb inflation caused prices to fluctuate sharply.
Ukraine imports almost the entire volume of fuel. The main factor that influences the price of fuel in Ukraine is world oil prices. Gasoline and diesel fuel fell in price in Ukraine at the end of 2023 due to lower oil prices.
2024-01-08 06:26:43
#Saudi #Arabia #lowered #oil #prices #causing #global #prices #fall
/data/photo/2024/01/08/659b988005c2a.jpg?resize=150%2C150&ssl=1)