Saudi Arabia Lowers Oil Prices Amid Demand Concerns
Saudi Aramco has reduced the price of its Arab Light crude for Asian markets by 70 cents per barrel, setting the new price at $1.30 above the regional benchmark. This adjustment, slightly less than the anticipated 85-cent reduction, reflects growing worries about declining demand.
This week, oil prices dropped significantly due to concerns over weak demand, erasing all yearly gains. The market did not rebound even after the OPEC+ alliance decided to delay an output increase by two months. Key members will not implement the planned rise of 180,000 barrels per day for October and November.
The postponement could result in Saudi Arabia exporting less than 6 million barrels daily, continuing a trend seen over the past three months. The country, leading the Organization of Petroleum Exporting Countries, seems cautious about increasing supply amid sluggish oil demand in China and weak refining margins in Asia.
Analysts predict that oil stockpiles will grow through the end of the year and into 2025. Citigroup Inc. has warned that Brent crude prices could fall below $70 per barrel if OPEC+ had proceeded with the planned production easing.