On Monday, both WTI and Brent Crude dropped by almost 3% on the news of significant price reductions from leading exporter Saudi Arabia and an increase in the Organisation of the Petroleum Exporting Countries’ (OPEC) output.
WTI Crude was down by 2.91%, while Brent Crude was down by almost 2.70% at the time of writing on Monday.
Saudi Arabia has slashed its crude selling prices to Asian customers, marking the most significant price cut in 13 months.
Saudi Aramco, the country’s oil giant, reduced its flagship Arab Light price by $2 per barrel.
Counteracting the rise in prices driven by geopolitical tensions, a recent Reuters survey revealed that output from OPEC increased by 70,000 bpd in December, reaching 27.88 million bpd.
Antony Blinken, the U.S. Secretary of State currently in the Middle East, further warned that, without a coordinated peace initiative, the Gaza conflict has the potential to escalate throughout the region.
Additionally, in the U.K., “the current Conservative government, whose tenure effectively dates back to 2010 and covers a flurry of five prime ministers, could be seen as having taken an increasingly interventionist approach to the economy, given such initiatives as sugar taxes, Help to Buy, energy price caps, and windfall taxes on North Sea oil producers,” said AJ Bell investment director Russ Mould.