WTI Crude nosedives over 4% as Saudi Arabia cuts prices
- WTI's sharp decline triggered by Saudi price cuts to Asian markets, amidst increased oil production by some OPEC members.
- Geopolitical tensions in the Middle East initially boosted oil prices, but escalating supply eases concerns.
- US diplomatic efforts intensify in the Middle East, as conflict impacts global shipping and oil market sentiments.
West Texas Intermediate (WTI) slid more than 4% on Monday as Saudi Arabia implemented price cuts, while the Organization of Petroleum Exporting Countries (OPEC) offset supply concerns amid geopolitical tension in the Middle East. At the time of writing, the US Crude Oil benchmark exchanges hands at $72.21 per barrel, a loss of 4.63%.
US Oil benchmark dropped to $70.16 on Middle East conflict concerns
Since the beginning of the year, WTI’s rose by 2% amid risks of an escalation in the Middle East conflict between Israel and Hamas. Attacks by Yemen’s Houthis on ships in the Red Sea underpinned Oil prices.
Oil prices dived by rising supply as Crude output production increased in some countries led by Angola, offsetting continuing cuts by Saudi Arabia and other members of the OPEC. Therefore, that sparked Saudi Arabia’s price cut to Asian customers to its lowest level in 27 months, according to Reuters.
Meanwhile, the ongoing crisis in the Middle East gathered attention from the US Secretary of State Anthony Blinken, who held talks with Araba leaders on Monday to increase the efforts pushing for a diplomatic exit to the Gaza war from further spreading.
Nevertheless, the conflict is already weighing economically with rising shipping freight rates, as most ships avoid sailing through the Red Sea.
WTI Price Analysis: Technical outlook
Oil’s leg down on Monday pushed prices towards its daily low of $70.19, but sellers' failure to step in lifted Crude to the brisk of regaining $71.00, which could pave the way to test the 50-day moving averages (DMA) at $75.06. Once hurdled, the next stop would be the $76.00 figure, followed by the 200-DMA at $77.87.