JAKARTA - Saudi Aramco, the largest oil company in Saudi Arabia, recently cut the price of its flagship crude oil for the February 2024 contract to its lowest level in 27 months.

 Quoting Asharq Al-Awsat, Tuesday (9/1), Saudi Aramco cut the official selling price (OSP) for the Arab Light price for February 2024 delivery to Asia by US$2 per barrel, from January to US$1.50 per barrel above the Oman/Dubai price. This level was last seen in November 2021.

  The price cut is the largest in 13 months and is in line with market expectations as refiners demand competitive prices from Saudi Arabia, compared to crude oil supplied from other Middle East producers and arbitrage cargoes from the Atlantic Basin. 

 Furthermore, Aramco also cut the price of other crude oil sold to Asia by US$2 per barrel in the February 2024 contract compared to previous months.

 For other regions, Saudi Aramco cut Arab Light OSP for the February 2024 contract to northwest Europe by US$2 per barrel to US$0.90 per barrel, above ICE Brent.

 Arab Light OSP to the United States was reduced by US$2 per barrel to US$5.15 compared to ASCI in February.

 Based on business records, oil experienced its first annual decline since 2020. The loss was driven by rising supply outside OPEC+, concerns of slowing demand growth this year. 

 As early as 2024, Wall Street expects crude oil to face more challenges ahead, with major banks having cut their projections for this year.

 Head of commodity strategy at ING Groep NV Warren Patterson also said that supply disruptions and Middle East tensions continue to provide support.

 "However, in the absence of escalation in the Middle East, we expect the upside to be limited, given the fairly good balance during the first half of 2024," he explained. 

 Now, crude oil prices are in the position of the biggest decline in a month amid signs of weakening physical markets. However, the current weakness points to a strengthening position.

 Based on Bloomberg data, Tuesday (9/1/2024), the price of West Texas Intermediate (WTI) oil for the February 2024 contract strengthened 0.07% or 0.05 points to the level of US$70.82 per barrel at 11:40 WIB.

  Meanwhile, the price of Brent oil for the March 2024 contract strengthened 0.20% or 0.15 points to US$76.27 per barrel at 11:39 WIB.

Sources : ekonomi.bisnis.com- Jan 09.24