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THE GIST
NEWS AND FEATURES
Global Philippines Fine Living
INSIGHTS
INVESTMENT STRATEGY
Economy Stocks Bonds Currencies
THE BASICS
Investment Tips Explainers Retirement
WEBINARS
2024 Mid-Year Economi Briefing, economic growth in the Philippines
2024 Mid-Year Economic Briefing: Navigating the Easing Cycle
June 21, 2024
Investing with Love
Investing with Love: A Mother’s Guide to Putting Money to Work
May 15, 2024
retirement-ss-3
Investor Series: An Introduction to Estate Planning
September 1, 2023
View All Webinars
DOWNLOADS
grocery-2-aa
Economic Updates
Inflation Update: Prices rise even slower in May 
June 5, 2025 DOWNLOAD
Buildings in the Makati Central Business District
Economic Updates
Monthly Recap: BSP to outpace the Fed in rate cuts 
May 29, 2025 DOWNLOAD
economy-ss-9
Economic Updates
Quarterly Economic Growth Release: 5.4% Q12025
May 8, 2025 DOWNLOAD
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Markets 3 MIN READ

Oil falls over 3% as Saudi price cuts add to demand doubts

January 8, 2024By Reuters
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NEW YORK, Jan 8 – 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 USD 2.64, or 3.4%, at USD 76.12 a barrel, while US West Texas Intermediate crude futures lost USD 3.04, or 4.1%, at USD 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.”

US 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.

(Reporting by Stephanie Kelly in New York; additional reporting by Natalie Grover and Noah Browning in London, Mohi Narayan in New Delhi, and Florence Tan in Singapore; editing by David Goodman, Kirsten Donovan, Sharon Singleton, Barbara Lewis, and Richard Chang)

 

This article originally appeared on reuters.com

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