Crude Settles Higher Despite Saudi Price Cut

by Bloomberg | Will Kubzansky, Alex Longley
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas

Oil climbed in choppy trading as the market weighed geopolitical tensions against a price cut on Saudi Arabia’s main grade of crude to Asia.

West Texas Intermediate rose 1.2% to settle below $60. Ukrainian negotiators will have a new round of talks in Florida as Russian President Vladimir Putin said some points in a US-backed peace plan to end Moscow’s war were unacceptable to him. That means a lifting of sanctions on Russian oil is still elusive, offering support to prices.

Lending further support, Putin emphasized that his country’s energy cooperation with India “remains unaffected.” He added that a Russian oil company has been “continuously expanding operations” of an Indian refinery, and Moscow’s oil flows to India are running smoothly.

Meanwhile, US President Donald Trump reiterated on Wednesday that the US will start striking alleged drug cartels on land in Venezuela very soon. Military intervention could force the South American nation’s oil production and exports to drop.

Still, signs of a surplus are proliferating in global oil markets. State producer Saudi Aramco will reduce the price of its flagship Arab Light crude grade to a 60-cent premium to the regional benchmark for January, according to a price list seen by Bloomberg. The cut brings prices to the lowest level since 2021.

Crude prices are down about 17% this year as booming supply from the Americas, coupled with hikes from the OPEC+ group itself, has exceeded subdued demand growth. Canadian crude prices have fallen to their weakest point relative to the US benchmark since March. And the International Energy Agency has predicted a record glut in 2026, while Wall Street banks expect futures to head lower.

While lower prices are a pain point for producers, they offer a boon for consumers. US gasoline prices fell below $3 a gallon for the first time in four years on Tuesday. Meanwhile, the price of diesel has been steadily ticking down in recent weeks.

“No matter how much demand is going to come in, you just have a lot of supply,” Trafigura Group’s Chief Economist Saad Rahim said at the Financial Times Commodities Asia Summit in Singapore on Wednesday. “The path of least resistance for prices is likely down.”

Oil Prices

• WTI for January delivery rose 1.2% to settle at $59.67 a barrel in New York.
• Brent for February settlement climbed 0.94% to settle at $63.26 a barrel.

by Bloomberg | Will Kubzansky, Alex Longley
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas