WTI moves lower to near $73.00 on Saudi’s price cuts, OPEC+ oil output rise
- WTI price faces challenges as Saudi has cut prices of its Arab Light Crude to Asia.
- OPEC+ oil output increased by 70,000 bpd to reach 27.88M bpd in December – Reuters Survey
- Iraq, Angola, and Nigeria reported an uptick in their export shipments of Crude oil.
- US Secretary of State Antony Blinken has warned that the Gaza conflict can spread across the region without peace efforts.
The West Texas Intermediate (WTI) price retraces its recent gains, trading lower near $73.00 per barrel during the Asian session on Monday. The decline in Crude oil prices is attributed to a combination of factors, including price cuts by top exporter Saudi Arabia.
Additionally, a rise in Organization of the Petroleum Exporting Countries and its allies (OPEC+) output, which increased by 70,000 barrels per day (bpd) in December to reach 27.88M bpd, according to a Reuters survey, is contributing to the downward pressure on oil prices.
The survey results indicate that the most significant increases, amounting to 60,000 barrels per day (bpd), came from Iraq and Angola in December. Furthermore, Nigeria also reported an uptick in the shipment of crude oil abroad during the same period. This rise in oil output is counteracting the ongoing production cuts by Saudi Arabia and other members of the OPEC+ alliance.
The survey findings highlight that Saudi Arabia has indeed lowered its production slightly, bringing it below 9M bpd. Furthermore, the country has extended a voluntary 1M bpd output cut. These deliberate measures are part of Saudi Arabia's efforts to influence global oil prices
Adding to the dynamics, Saudi Arabia announced on Sunday a reduction in the February Official Selling Price (OSP) of its flagship Arab Light crude to Asia, marking the lowest level in 27 months.
The Iran-backed Houthis escalated supply concerns last week by launching two anti-ship ballistic missiles at a container ship in the southern Red Sea en route to Israel. This provocative action adds to the geopolitical tensions in the region, particularly around maritime routes.
US Secretary of State Antony Blinken has issued a warning regarding the Gaza conflict, stating that without concerted peace efforts, the conflict has the potential to spread across the region.