Oil Market Softens as Signs of a Glut Overwhelm Saudi Pledges - Yahoo Finance

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(Bloomberg) -- Key oil market gauges are indicating that supplies are outstripping demand, overshadowing Saudi Arabia’s pledges that OPEC+ will deliver on its planned production cuts.

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Saudi Arabia on Tuesday lowered its official crude selling prices to Asia for next month, a sign of weakness in markets as OPEC and its allies deepen output curbs in an attempt to avoid a surplus. The decision comes as an influx of US cargoes threatens to flood markets in Asia, pushing timespreads to hover near February lows.

West Texas Intermediate swung in a range of almost $2 on Tuesday and was trading up about 1% to near $74. Prices had dropped more than 6% in the preceding three sessions. Saudi Energy Minister Prince Abdulaziz bin Salman told Bloomberg News that supply cuts would “overcome” an expected inventory build in the first quarter and could be continued further into 2024 if needed.

Read More: OPEC+ Cuts Can ‘Absolutely’ Stay Past March, Saudi Minister Says

Oil has declined as traders remain unconvinced that the new curbs of about 900,000 barrels a day from the Organization of Petroleum Exporting Countries and its allies will be fully implemented. Production from outside the alliance has consistently surpassed expectations this year, damping market bullishness.

The market is also grappling with how to deploy risk in the final month of a year in which Brent futures at one point slumped to $70 a barrel, but also threatened a rally to $100.

Meanwhile, Russian President Vladimir Putin will travel to the United Arab Emirates and Saudi Arabia this week, according to people familiar with the plans. Moscow is a key member of the broader OPEC+ grouping.

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