On Monday, crude oil rates slashed more than $1 a barrel as Saudi Arabia made the most significant monthly price cuts in five months for supply to Asia, marking the lowest costs since July. The action is taken after the nation’s positive outlook towards demand recovery looks to fade away amid the coronavirus crisis.
US’s WTI (West Texas Intermediate) crude shed 2.3% or 91 cents to trade at $38.86 per barrel after hitting a low of $38.55 a barrel, the lowest level since July 10. Similarly, Britain’s Brent crude skidded 2.1%, or 91 cents to trade at $41.75 a barrel at 00:00 GMT, after falling to $41.51, the level not seen since July 30.
Oil export pioneer, Saudi Arabia, slumped the official October sale price for Arab Light crude, which it sells to Asia, by the most massive cut since May. The world is still flooded with oil, crude, and other fuel supplies despite the administration and OPEC+ members’ continuous efforts to cushion the world economy. The lacklustre demand urged the oil refiners to control the output and make big price slashes.
In contrast to Saudi’s move, the OPEC+ allies loosed the production cuts, easing it to 7.7M BPD, from August as the global oil rates recovered from coronavirus crisis. The recovery in prices inspired US drillers to return to wells.