Tuesday, 09 January 2024 04:46

Oil falls as Saudi price cuts add to demand doubts

Rate this item
(0 votes)

Oil prices fell over 3% on Monday on sharp price cuts by top exporter Saudi Arabia and a rise in OPEC output that offset supply concerns generated by escalating geopolitical tension in the Middle East.

Brent crude settled down $2.64, or 3.4%, at $76.12 a barrel, while U.S. West Texas Intermediate crude futures lost $3.04, or 4.1%, at $70.77 a barrel.

Both contracts climbed more than 2% in the first week of 2024 as geopolitical risk in the Middle East intensified after attacks by Yemen's Houthis on ships in the Red Sea.

On Sunday, rising supply and competition from rival producers prompted Saudi Arabia to cut the February official selling price (OSP) of its flagship Arab Light crude to Asia to the lowest level in 27 months.

"That's raising concerns about demand in China and global demand as well," Price Futures Group analyst Phil Flynn said. "The stock market is off to a weak start this year and this news from Saudi Arabia has caused the bottom to fall out."

A Reuters survey on Friday found that OPEC oil output rose in December as increases in Angola, Iraq and Nigeria offset continuing cuts by Saudi Arabia and other members of the wider OPEC+ alliance.

The boost came ahead of further OPEC+ cuts in 2024 and as Angola exited from OPEC starting this year, factors which are set to lower January output and market share.

"If we were just to focus on the fundamentals, including higher inventories, higher OPEC/non-OPEC production and a lower than expected Saudi OSP, it would be impossible to be anything other than bearish on crude oil," said IG analyst Tony Sycamore.

"However, that doesn't take into account the fact that geopolitical tensions in the Middle East are undeniably rising again, which will mean limited downside."

U.S. Secretary of State Antony Blinken held more talks with Arab leaders on Monday as part of a diplomatic push to stop the war in Gaza from spreading further.

The conflict has already sparked violence in the Israeli-occupied West Bank, Lebanon, Syria and Iraq, and also led to Houthi attacks on Red Sea shipping lanes.

Meanwhile, the oil price slide was tempered by a force majeure by Libya's National Oil Corporation on Sunday at its Sharara oilfield, which can produce up to 300,000 barrels per day.

 

Reuters

March 18, 2025

While Nigeria hikes ship berthing charges to $200,000, in Ghana it’s $15,000, Shanghai $21,000, Cotonou…

Following the recent 15 per cent increase by the Nigerian Ports Authority (NPA) in port…
March 16, 2025

El-Rufai speaks further on Tinubu’s presidency, Chicago scandal, other issues

Former Kaduna State Governor Nasir El-Rufai has revealed that he and other political leaders were…
March 17, 2025

7 so-called ‘status symbols’ that only impress the middle class

Isabella Chase Picture this – you’re in a room full of people, and someone walks…
March 01, 2025

Man offers to split $525,000 jackpot with thieves who stole his credit card to buy…

A Frenchman appealed to the homeless thieves who stole his credit card to buy a…
March 14, 2025

Gunmen invade Kaduna communities, abduct 10

Suspected bandits have abducted ten villagers from three remote communities in Kajuru Local Government Area…
March 18, 2025

Here’s the latest as Israel-Hamas war enters Day 529

Ceasefire over as Israel strikes Gaza after Hamas refused to release hostages, officials say The…
March 15, 2025

Humanoid robot with human-like competence unveiled in China

Du Qiongfang Humanoid robot manufacturer AgiBot in Shanghai unveiled on Tuesday its latest humanoid robot…
January 08, 2025

NFF appoints new Super Eagles head coach

The Nigeria Football Federation (NFF) has appointed Éric Sékou Chelle as the new Head Coach…

NEWSSCROLL TEAM: 'Sina Kawonise: Publisher/Editor-in-Chief; Prof Wale Are Olaitan: Editorial Consultant; Femi Kawonise: Head, Production & Administration; Afolabi Ajibola: IT Manager;
Contact Us: [email protected] Tel/WhatsApp: +234 811 395 4049

Copyright © 2015 - 2025 NewsScroll. All rights reserved.