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Oil prices fell 4% today as one of the world’s largest oil producers predicted lower prices for petroleum products in the coming weeks.
U.S. benchmark WTI crude oil was down 4% by 4pm GMT, while Brent and Murban crudes were down 3.% and 4.1%, respectively.
The decline came as Saudi Arabia lowered the official selling price (OSP) of global crude oil production in February, making it the largest decline in Asia at nearly 2%.
The impact on global oil markets is due to the fragile geopolitical environment of the Russia-Ukraine and Israeli-Palestinian conflicts, as well as lingering shipping problems in the Red Sea and the massive oil crisis that continued for a second day at Libya’s main oil field, Sharjah. It was further heightened by the protests.
said Greg Newman, CEO of oil derivatives firm Onyx Capital Group. told City AMThe price cuts signal broader questions about how Saudi Arabia views its ability to weather the currently chaotic battle to control oil prices.
“The recent price cuts are a strong sign that Saudi Arabia is losing confidence that it can stick to its long-term price reduction strategy without losing market share and weakening its efforts,” he said.
“Recent meetings have shown that Saudi Arabia is starting to put pressure on other member states to share the burden. This is a warning to other Member States that this may change.” Instead of gaining market share.
“This threat is very real because, as we saw in April 2020, Saudi Arabia does not do things by halves, and such a change in strategy would leave others at a very low price. It would cause serious harm to member states.”
The US also plays a dominant role in price trends, as has often been seen recently.
U.S. crude oil reserves are expected to increase by more than 13 million net barrels by 2023, according to American Petroleum Institute data released last week.
Crude oil inventories in the Strategic Petroleum Reserve (SPR) continued to increase by 1.1 million barrels last week compared to the previous seven days.
Source: www.cityam.com
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