Crude Oil Declines after Saudi Arabia Decision

  •   08/09/2020 - 10h30
  •   HARMANT Adeline

During this first session of the week, the price of Crude Oil saw a further decline, mainly due to the ever-present effects of the Covid-19 crisis, but also following a decision by Saudi Arabia regarding its prices. We propose you to learn a little more about this news in this article.

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Crude Oil Declines after Saudi Arabia Decision
Image copyright: anax44 - Flickr

Oil opens the week down:

Should we expect a WTI barrel price below $39? This remains totally conceivable today in view of the current context of this market. Indeed, it should be remembered that China is currently slowing down its purchases of black gold, that air traffic is showing only an extremely weak recovery and that American motorists have been consuming less since the end of the holidays. For its part, however, production continues to increase day by day despite the lack of global economic recovery.

Thus and during Monday's session, black gold prices fell to one-month lows for Brent and two-month lows for WTI, due to continued demand concerns and lower Saudi oil prices.

This morning, a barrel of North Sea Brent for delivery in November thus fell to $42.08 on the London market, a drop of 1.36% compared to its close on Friday. As for the barrel of WTI, it cost 39.17 dollars, a fall of 1.51%. Just after the opening of the session in Asia, Brent fell to $41.51 and WTI to $38.55, their lowest levels since June and July.

In particular, it was Saudi Arabia's announcement of its biggest price drop in 5 months for its production for Asia that took place at a time when concerns are growing about the recovery in demand.

 

Air traffic is also plummeting the sector:

It must be said that the drop in automobile traffic at the end of the holiday season, especially in the United States, is not the only reason for investors' worries. Indeed, air traffic is also far from having returned to normal levels and demand for aircraft fuel is at its lowest. OPEC's efforts have failed to stem this loss of trader interest in black gold.