Oil down after Saudi Arabia slashes crude price
Saudi Aramco said it had slashed its official selling price for Arab light grade oil bound for Asia
Oil fell in Asia on Friday after major producer Saudi Arabia slashed the price of the crude that it sells to Asia and the United States, analysts said.
U.S. benchmark West Texas Intermediate (WTI) for January delivery tumbled 31 cents to $66.50 a barrel in late-morning trade and Brent crude for January dropped 38 cents to $69.26.
“Saudi Arabia has just cut the price of the oil it sells to Asia and the U.S. and this is going to have a big effect on the market today and early next week,” said Daniel Ang, an investment analyst at Phillip Futures in Singapore.
Saudi Aramco, the kingdom’s state-owned oil company, said Thursday it had slashed its official selling price for Arab light grade oil bound for Asia in January by $1.90 a barrel from December’s level.
It also reduced the price of Arab light grade oil bound for the United States by 70 cents.
“They’re definitely fighting for market share,” Ang told AFP.
Saudi Arabia is the biggest and most influential member of the Organization of the Petroleum Exporting Countries (OPEC), which late last month decided to maintain output levels despite a global oversupply.
OPEC's decision at its November 27 meeting in Vienna sent oil prices tumbling to their lowest point in five years.
Singapore’s United Overseas Bank said Saudi Arabia's move was “reinforcing concerns that the world’s leading exporter is now more focused on defending its market share than increasing price.”
“Saudi reportedly believes oil prices could stabilize at $60 a barrel and there is also rife speculation that Saudi is also trying to drive high-price producers out of the market,” it said in a market commentary.
But French bank Credit Agricole said lower prices should give emerging markets a boost.
“Oil-intensive economies, including the bulk of Asia, would benefit from lower inflation, larger monetary leeway to support the recovery, and lower corporate and household costs,” it said.
“Against such a backdrop this could support a scenario of a slight recovery in emerging market GDP growth in 2015.”
Saudi Arabia better placed to withstand cascading oil prices, study findsICAEW: failling oil prices will pose challenges to GCC markets, KSA, Qatar, UAE and Kuwait are better placed Energy
Algeria ready to weather oil price slumpAlgeria had been able to accumulate substantial currency reserves to help deal with the lower cost of oil Energy
Turkish stocks boosted by oil price slump, Turkish Airlines at recordTurkish assets have benefited from oil prices falling almost 30 percent Economy
Panorama: Impact of low oil prices on Gulf marketsNews Bulletins
Kuwait urges non-OPEC cooperation to stabilize marketGlobal oil prices plunged Friday to new multi-year lows after the OPEC the decision despite an oversupplied market Energy
How to face fears of falling oil pricesWhy aren’t officials being transparent and honest? Why aren’t they talking more about this issue and what could happen in the next few days? Middle East