Crude oil prices drop by several percent on Monday. The reason is Saudi Arabia’s decision to reduce export prices and increase production by member countries of the Organization of the Petroleum Exporting Countries (OPEC), Reuters reported.
A barrel of WTI crude oil listed on the New York Stock Exchange cost $70.40 on Monday evening, after a fall of 4.62%. In turn, Brent crude oil on the London Stock Exchange cost USD 75.81 per barrel, i.e. approximately 3.75%. less than on Friday.
The XTB brokerage noted that the raw material reduces the significant price rebound from the first week of 2024.
Oil prices down
“The price rebounded at the beginning of January due to the continued tension in the situation in the Middle East, and above all following Houthi attacks on merchant ships in the Red Sea. Additionally, production has stopped in the largest oil field in Libya, which limits the available supply on the market, adding to the entry into force of voluntary production cuts by OPEC countries,” we read in the commentary.
Saudi Arabia over the weekend, it announced that it had reduced the export prices of its Arab light crude oil to Asian countries to the lowest levels in 27 months.
Additionally, Reuters drew attention to its Friday estimates, which show that oil production by OPEC countries increased in December. As explained, increases in w are responsible for this AngolaIraq and Nigeriawhich offset production cuts by Saudi Arabia and other members of the Organization of the Petroleum Exporting Countries and its allies, including Russia (OPEC+).
However, declines are expected in January 2024 due to further voluntary production cuts by OPEC+ members. Additionally, the number of OPEC members will decrease, and Angola will leave the organization.
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