Oil is dropping sharply!

(Boursier.com) — Last week’s rebound has already been erased! Crude prices fell sharply on Monday after Saudi Arabia lowered the official selling price of its oil for February on Sunday. State producer Saudi Aramco has cut the price of its flagship Arab Light product to Asia by a higher-than-expected $2 per barrel due to continued weak demand. “Oil watchers are rightly wondering whether the Kingdom’s reduction is not only aimed at cracking down on interference from non-OPEC supplies but also from the cartel’s own members,” John Evans of OPEC told Reuters. oil broker PVM.

This decision by the world’s largest producer came just days after the planet’s biggest speculators increased their bearish bets on Brent and West Texas Intermediate to a level almost not seen since 2017, according to ‘Bloomberg’ data. . Despite the high tension in the Red Sea and concerns about production in several major OPEC countries, concerns about demand are clearly taking over this Monday.

“There is certainly significant supply,” Francisco Blanch, global head of commodities and derivatives at BofA, told ‘Bloomberg TV’. “Demand is slowing, we’ve had a very, very large rise in interest rates, which has really slowed things down. That combination is, I think, what’s driving prices down.” “If we were to focus solely on the fundamentals, including higher inventories, higher OPEC/non-OPEC production, and a lower-than-expected Saudi OSP, it would be impossible to be anything other than bearish on crude oil” , estimates Tony Sycamore, analyst at IG. “However, this does not take into account that geopolitical tensions in the Middle East are undeniably increasing, which will result in a limited decline.”

US Secretary of State Antony Blinken held new talks with Arab leaders on Monday as part of a diplomatic move to prevent the war in Gaza from spreading further. The conflict has already sparked violence in the West Bank, Lebanon, Syria and Iraq, and has also led to Houthi attacks on Red Sea shipping lanes. “Tensions in the Red Sea are the only counterweight, although relatively weak and intermittent, to crude prices which are succumbing to the downward movement given expectations of a slowdown in global demand and an increase in stocks,” underlines Vandana Hari, founder of Vanda Insights.

The barrel of Brent from the North Sea (March maturity) fell by 3.7% to $75.8 in London while the barrel of WTI (February contract) plunged by 4.1% to $70.8 on the Nymex.