By Rhodri Morgan
Oil prices have fallen for a fourth straight day amid ongoing uncertainty over the voluntary output cuts by OPEC+ and ahead of a meeting between Russia and UAE tomorrow.
Brent fell 0.9 per cent below $78 a barrel after dropping by more than six per cent in the preceding three sessions, while WTI crude dropped one per cent toward $72.
Additionally, state-owned Saudi Aramco lowered its Arab Light price to Asia for January by 50 cents to $3.50 a barrel more than the benchmark, according to a Bloomberg price list. The outlet reported that this is the first time since June the kingdom has reduced the value of its flagship grades.
Oil prices continued to fall despite comments from Saudi Arabia’s energy minister Prince Abdulaziz bin Salman who said OPEC+ supply cuts could continue beyond the first quarter of 2024.
However, the Kremlin has warned the cuts agreed by the OPEC+ group in a meeting last week will take time to kick in.
In October, OPEC+ chief Haitham Al Ghais warned that oil prices would likely remain high for the foreseeable future.
However, prices have remained broadly depressed following the OPEC+ meeting last week, where the group agreed on voluntary output cuts of 2.2m barrels per day for the first quarter of 2024.
However, the voluntary element of the deal left the markets questioning whether the supply reduction would actually come into effect.
Meanwhile, China’s gloomy outlook continues to depress outlooks with analysts from Moody’s downgrading the country’s credit rating.
Additionally, US crude oil production is at record highs, providing even more challenge to Saudi Arabia and its OPEC+ partners as they cut their own production to boost prices.
