Saudi Arabia cuts Crude Oil Prices for Asian Region

Oil prices lengthen losses on Monday, falling more than 1%, after Saudi Arabia – world’s top exporter cut crude prices for Asian region over the weekend, to make sure of the demand concerns and that the global markets are well supplied.

Last Sunday, Saudi Aramco advised the customers in a statement that it will cut October official selling prices (OSPs) for all crude grades sold to Asia, its biggest buying region, by at least $1 a barrel. The price cuts were larger than expected, according to a Reuters’ poll among Asian refiners.

Energy Aspects analyst Virendra Chauhan said, "The OSPs to Asia are bearish, signaling softer demand and potentially higher supply."

Losses were capped by concerns that U.S. supply would remain limited in the wake of Hurricane Ida.

The U.S. government is releasing the crude oil from their strategic petroleum reserves as production in the U.S. Gulf Coast struggled to recover. U.S. government data released on Friday showed that some of the 1.7 million barrels of oil and 1.99 billion cubic feet natural gas output remained offline. In addition, Power shortages are avoiding some refineries from resuming operations.

Data from Baker Hughes showed on Friday that the hurricane Ida also made the U.S. energy firms to cut last week the number of oil and natural gas operating for the first time in five weeks. The oil supply count alone fell the most since the month of June 2020.