Saudi Arabia's Big Price Cut! Crude Oil Plummets 4%

The official selling price of crude oil supplied by Saudi Arabia's Aramco in February was cut sharply, of which the official selling price of Arabian light crude oil supplied to Asia was cut by $2 per barrel compared with the official price in January, and $1.50 per barrel higher than the average price of Omani/Dubai crude, which is the lowest level of the differential since November 2021, and this is the biggest cut in 13 months.

Saudi Arabia's sharp cut in the official selling price of crude oil triggered concerns about weak market demand, and international oil prices fell sharply in response.

International oil prices ushered in a big dive, sinking nearly 4% picture, WTI crude oil is close to the 70 U.S. dollar mark!

The main reason for the plunge in oil prices, on the one hand, is the price adjustment of Saudi Arabia; in addition, the oil supply of producers outside of OPEC + has seen a surprisingly sharp increase; the U.S. Energy Information Administration (EIA) data show that last week, gasoline inventories and distillate inventories across the U.S. have increased by more than 10 million barrels, much higher than the market is expected to be, and all of the above news exacerbated investors' concerns about the oversupply of crude oil.

Overall, although OPEC+ has launched voluntary production cuts, market demand remains weak, coupled with the expected increase in OPEC's crude oil production in December and a large increase in U.S. refined product inventories, oil prices have been pressured to the downside. Now, geopolitical risk may be an important factor affecting oil prices in the near future, the Red Sea tensions have not been lifted for the time being, and it is worthwhile to continue to pay attention to how the subsequent trend will be.