On Monday, the world’s top exporter Saudi Arabia slashed crude prices for Asia over the weekend as oil prices extended losses. This signaled that the global markets are well supplied.
Since November, the Brent crude futures fell 98 cents (1.8%) to $71.63 a barrel by 0613 GMT and US West Texas Intermediate crude for October fell 95 cents (1.4%) to $68.34 a barrel. On Sunday, a statement was released from the state oil giant Saudi Aramco to the customers that they will cut October prices by at least $1 a barrel for all crude grades sold to Asia. Asia is their biggest buying region and the cuts in prices were larger than expected among Asian refiners.
In August the Asian customers requested fewer Saudi volumes as the delta variant prompted the return of movement of restriction. OPEC group expects the global oil market to continue tightening this year. They plan to receive output before flipping into surplus again in 2020.
The US indicated a patchy economic recovery that signals a slower fuel demand during a resurgent pandemic after the decline in crude. In the wake of Hurricane Ida, the losses were capped by the concerns that US supply would remain limited.