Oil stocks tumble as Saudi Arabia slashes Asia crude prices
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The news: Oil stocks extended losses in morning trade on the ASX after Saudi Arabia reduced its crude prices for Asia by more than expected.
The numbers: Oil and gas majors Beach Energy (-4.6%), Karoon Energy (-2.1%), Woodside Energy (-2%), Santos (-1.7%) and Ampol (-0.9%) were all trading lower by 11:45am AEDT.
Energy, down 1.5%, was the worst performing sector as the wider ASX 200 shed 0.4%.
Oil held a second weekly decline, with global benchmarks Brent crude and West Texas Intermediate largely flat at USD71.12 ($111.30) and USD67.22 per barrel respectively.
Saudi Aramco announced that it is cutting oil prices for buyers in Asia, Bloomberg reported. The state oil producer will lower its main Arab Light crude grade to a premium of 90 US cents a barrel to the regional benchmark in January, compared to USD1.70 this month. The company was expected to lower the premium to USD1, according to a survey of traders and refiners.
The context: The move by Saudi Aramco follows the decision by the Organization of the Petroleum Exporting Countries and allies led by Russia (OPEC+) to delay its planned oil production hikes last week. Both announcements are seen to reflect current levels of subdued demand in the market.
Elsewhere, traders will watch closely to see potential impacts to crude supply in the Middle East, following the toppling of the Syrian government, representing setbacks to longtime supporters and major oil producers Russia and Iran.
The source: Bloomberg
