Oil Prices Slip, Saudi Hikes Price for Asian Buyers
Crude oil prices retreated during early trading hours on Tuesday as uncertainties in the global commodities market persisted. The market has seen sustained imbalance between demand and supply side with Middle East tension, sanctions against Russia, and OPEC+ oil production extensions.
On the demand side, China and U.S demand outlook remain uncertain as a result of weak economic data. The move higher in crude oil prices appears to be running out of momentum with ICE Brent settling 0.27% lower on the day, ING commodities strategists said in a note.
Although Brent has continued to trade above US$76 per barrel and US benchmark West Texas Intermediate remained above $70 per barrel at the last look. Data showed that Brent fell by 0.6%, reaching $76.01 per barrel, down from $76.47 at the close of the previous session.
The US benchmark West Texas Intermediate (WTI) declined by 0.6%, dropping to $73.18 per barrel compared to its prior session close of $73.63.
While there has been some tightening in the physical market, fundamentals through 2025 are still set to be comfortable, which should cap the upside. “We still see oil prices trending lower through the year,” ING said.
In a latest report. Saudi Arabia has raised its official selling price for Arab Light into Asia by US$0.60 per barrel month-on-month to US$1.50/bbl over the benchmark for February loadings.
All grades into Asia saw increases ranging between US$0.40/bbl and US$0.60/bbl, according to reports. Analysts said the increase comes after OPEC+ decided last month to extend supply cuts.
In addition, the physical market in the Middle East has seen some strength more recently.
Preliminary OPEC production numbers are starting to come through, and according to a Bloomberg survey, crude oil production fell by 120,000 barrels per day (b/d) month on month to total 27.05 million b/d in December.
Declines were driven by the UAE, Kuwait, and Iran, where the former saw production falling by 100,000 b/d, while the latter two saw output decline by 40,000 b/d. Meanwhile, Iraqi oil production is estimated at 4.12 million b/d, still above its production target of 4 million b/d. #Oil Prices Slip, Saudi Hikes Price for Asian Buyers 2025 Budget: N13trn Deficit to be Financed Through Borrowing – Edun
