Saudi Aramco said on Sunday it would cut crude oil prices to all regions, including its largest market in Asia – a move that comes amid weak global oil prices and increased production by producers outside the Organization of the Petroleum Exporting Countries.
State producer Aramco said in a notice that February prices for various grades of Saudi crude, including the main Arab Light crude, in Asia would fall by $2 per barrel against the regional benchmark Oman/Dubai crude from January levels.
Aramco said the premium for Saudi crude versus the ASCI, a benchmark index for Gulf Coast sour crude, will also fall by $2 per barrel from January. Prices in northwestern Europe and the Mediterranean will fall by $1.50 to $2 per barrel versus the ICE benchmark Brent crude price versus January prices.
After a summer surge attributed in large part to Saudi Arabia's decision to implement a production cut of 1 million barrels per day on top of existing cuts by other members of OPEC and its allies, including Russia, crude oil fell sharply in the fourth quarter. Saudi Arabia and OPEC+ extended the cuts until 2023.
WTI CL00
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The US index fell more than 21% in the fourth quarter to record a 10.7% decline in 2023. Brent crude BRN00,
The global index fell by about 19% in the fourth quarter, and will also lose 10.3% in 2023.
Oil rebounded last week, finding some support as attacks on shipping in the Red Sea by Iran-backed Houthi rebels operating out of Yemen changed the course of crude oil and raised fears of a broader conflict that could further threaten oil flows in the Middle East. Analysts said these shifts led to increased demand for US crude, which helped narrow WTI's discount against Brent and perhaps put US exports on track to break records.
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Meanwhile, US oil production has exceeded 13 million barrels per day, reaching or near record levels, helping to ease previous fears of supply shortages.
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