(News Bulletin 247) – Black gold prices are falling after Saudi Arabia’s decision to reduce the selling price of its crude to the lows of November 2021.

Oil prices are experiencing high volatility at the start of the year. They increased by more than 2% in the first week of January in response to a reduction in Libyan supply and tensions in the Middle East.

This Monday, oil prices are now in red as Saudi Arabia decided to lower the price of its flagship product for its Asian customers to the lowest of November 2021.

The world’s largest exporter of black gold indicates that it has lowered its flagship price for Arab Light loaded in February for Asia by 2 dollars per barrel, compared to January prices. This decision reflects the weakness of demand from its Asian customers, led by China, which is the world’s largest importer of oil. And this weighs massively on the prices of the two global benchmarks.

Tensions in the Middle East

The price of a barrel of Brent from the North Sea, for delivery in March, plunged 2.8% to $76.59, while its American equivalent, a barrel of West Texas Intermediate (WTI), for delivery in February, plunged by 3% to $71.60.

“Supply disruptions and tensions in the Middle East continue to provide some support,” said Warren Patterson, head of commodities strategy at ING Groep NV as quoted by Bloomberg. “However, in the absence of escalation in the Middle East, we believe that the increase is limited, given a fairly comfortable balance during the first half of 2024,” continues the specialist.

On the Paris Stock Exchange, oil and oil prices are trending downward in the wake of the decline in black gold prices. Heavyweight on the Parisian coast, Totalenergies lost 1.6%, Vallourec for its part lost 1.65% and Technip Energies returned 3.1% this Monday.