Market

Oil Extends Losses as Saudi Arabia Slashes Asian Crude Prices By Bloomberg

© Bloomberg. A gas turbine generator at the Khurais Processing Department in the Khurais oil field in Khurais, Saudi Arabia, on Monday, June 28, 2021. The Khurais oil field was built as a fully connected and intelligent field, with thousands of sensors covering oil wells spread over 150km x 40km in order to increase the efficiency of the plant and reduce emississions, according to a Saudi Aramco statement released to the media. Photographer: Maya Sidiqqui/Bloomberg

(Bloomberg) — Oil extended losses at the open after Saudi Arabia slashed crude prices for Asian buyers by a larger-than-expected margin just days after OPEC+ agreed to continue raising production.

Futures in New York edged below $69 a barrel after falling 1% on Friday. The October price for Saudi’s flagship crude was cut by $1.30, more than double the forecast reduction. Traders were surprised by the move, attributing it to factors including arbitrage inflows and competition to retain market share. 

After rallying in the first half of 2021, crude’s surge has stalled as the market weighed both bearish and bullish signals. New Covid-19 variants and the readiness of governments to release strategic reserves weighed on investor sentiment, even as a decline in global crude inventories and record-high U.S. fuel consumption added to optimism. 

Asian buyers will need to submit their requests for October volumes by Sept. 6. Saudi official prices for cargo sales to the U.S., Northwest Europe and the Mediterranean were stable or little changed, pointing to the producer’s intent on prioritizing oil flows to Asia. 

Last month, some Asian customers requested less Saudi volumes as the delta variant prompted the return of movement restrictions. Still, OPEC and its allies expect global oil markets will continue to tighten this year even as they revive output, before flipping into surplus again in 2022. 

Separately, traders are closely watching for the return of oil production and refineries affected by Hurricane Ida. The U.S. granted a second refiner in Louisiana access to the country’s emergency crude stockpiles as most oil-producing platforms in the Gulf of Mexico remain offline. 

©2021 Bloomberg L.P.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.


Most Related Links :
Business News Governmental News Finance News

Source link

Back to top button