On Monday, both US West Texas Intermediate and UK crude oil futures’ prices had wrapped up the day lower, as the OPEC-kingpin Saudi Arabia had sharply trimmed its light crude prices for Asia amid concerns over demand outlook, while a significant scale of lack in crude supplies due to Hurricane Ida appeared to have botched to offset the bearings of latest Saudi move.
In point of fact, in the day’s modest decline in crude oil futures’ prices were almost entirely galvanized by a Saudi move to lower its crude prices to Asia, as the oil-rich kingdom’s state-backed energy giant Aramco had said in a statement on Sunday that it would slash October OSPs (Official Selling Prices) for all crude grades to Asia by at least a $1 per barrel.
However, the prices would remain unchanged for Europe and the US. Nevertheless, a devastating Category IV Hurricane Ida had led to a substantial scale of decline in outputs as drilling rigs in the US Gulf of Mexico had borne the heaviest brunt of the storm, curbing out as much as 1.6 million bpd (barrels per day) of crude production.
Though, an upscaled holdup in oil outputs on Monday had failed to lift investors’ morale as both crude oil contracts fell over 0.5 per cent in late-afternoon US trading after treading water much of the session.
Crude oil falls after Saudi slashes oil prices for Asian markets
Citing statistics, in the day’s commodity market wind-up, UK crude futures’ prices had rounded off the day 0.75 per cent lower to $72.22 a barrel, while US WTI crude oil futures’ prices settled 0.50 per cent down at $68.69 per barrel.
Meanwhile, referring to Saudi Aramco’s latest move to slash crude oil prices for Asia, the largest market for the resource-rich Kingdom, a head of oil markets at Rystad Energy, Bjornar Tonhaugen said, “When the Saudi giant cuts its selling prices to Asia for October, signalling it sees the supply-demand relationship slightly shifting, traders can’t but follow down that path today”.