Oil futures fell on Monday, under pressure after Saudi Arabia cut crude prices to all regions, and at a time when surveys showed rising production by members of the Organization of the Petroleum Exporting Countries.
Price movement
-
West Texas Intermediate crude for February delivery CL00,
-2.72% every.1,
-2.72% clg 24,
-2.72%
The price of a barrel of oil fell by $2.24, or 3%, to reach $71.57 per barrel on the New York Mercantile Exchange. -
Brent crude for March BRN00,
-2.48% BRNH24,
-2.48% ,
The global index fell $2.15, or 2.7%, to $76.61 a barrel on the ICE Futures Europe exchange.
Market driving factors
State producer Saudi Aramco said on Sunday that it would reduce the official selling price of crude to all regions, including its largest market in Asia, in February. The spread between Saudi crudes, including the main Arab Light crude, compared to local standards will be reduced by up to $2 per barrel.
“When a major oil producer like Saudi Arabia offers price cuts, it is either a sign of concern about weak demand conditions or an attempt to prevent foreign producers like the United States from stealing market share,” Marios Hadjikriakos, chief investment analyst at XM, said in a note. . “Either way, it's a bearish signal for energy prices.”
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.
be seen: Why chaos in the Red Sea is pushing oil buyers 'into the arms of US shale producers'
Meanwhile, a Reuters survey published on Friday showed that production by OPEC members rose in December, as increases in Iraq, Nigeria and Angola offset cuts by Saudi Arabia and other OPEC+ members. Angola announced last month that it would withdraw from OPEC.
The survey estimated production at 27.88 million barrels per day, an increase of 70 thousand barrels per day from November. Production has fallen by more than 1 million barrels per day since December 2022.
Analysts said that production disruptions in Libya helped raise crude oil prices last week and will limit the downward trend.
After protests last week forced Libya to close the Sharara oil field, Libya's National Oil Corporation on Sunday declared force majeure at the field, news reports said. Analysts at ING said that the closure of the oil field led to a decrease in total Libyan oil production from about 1.2 million barrels per day to 981 thousand barrels per day on Friday.
