Oil prices are falling today. This is due to a significant price cut by Saudi Arabia, the world’s largest exporter, and an increase in production by the OPEC group, which offset supply concerns caused by escalating geopolitical tensions in the Middle East.
Around 18:00 CET, the price of Brent North Sea crude fell by 3.96 percent to 75.64 dollars per barrel. U.S. WTI crude lost 4.77 percent at the same time, trading at $70.29 a barrel.
On the other hand, both contracts rose by more than two percent last week. It was the intensification of the geopolitical risk in the Middle East after the attacks on ships in the Red Sea.
Rising supplies and competition prompted Saudi Arabia on Sunday to cut the official selling price of its Arab Light oil for February to a 27-month low. Analysts say this raises concerns about demand in China as well as global demand.
A Reuters poll on Friday showed oil production by the Organization of the Petroleum Exporting Countries (OPEC) rose in December. Higher production in Iraq, Angola and Nigeria outweighed continued production cuts by Saudi Arabia and other members of the wider OPEC+ alliance.
But analysts also point out that geopolitical tensions in the Middle East are growing again, which will hinder further declines in the price of oil. US Secretary of State Antony Blinken held talks with Arab officials today as part of a diplomatic effort to stop the spread of the war in the Gaza Strip.
The drop in oil prices is also being slowed by an announcement by Libya’s national oil company NOC to suspend production at one of the country’s largest fields, which can produce up to 300,000 barrels a day, amid local protests. The NOC added that it is talking about resuming mining as quickly as possible.
2024-01-08 18:51:21
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