Oil prices fell at the beginning of weekly trading on Monday by 2.6 percent compared to the close of the Friday session amid weak global demand for crude.
On Sunday, Saudi Aramco reduced the official selling price of its key Arab Light crude to a premium of $1.50 per barrel above the regional index for February.
This compares to a premium of $3.5 for the current month, which is the lowest level since November 2021.
Aramco’s decision comes after weak spot price differences for Middle Eastern crudes due to China’s weak appetite and increased global supplies, according to an analysis published by Bloomberg earlier today.
By 11:46 GMT, futures prices for Brent crude for March delivery fell by 2.6 percent, or $2.15, to $76.56 per barrel.
The significant reduction in official oil prices by Saudi Arabia reinforced signs of weakness in the global oil demand market in major markets, led by China.
Saudi Arabia is the largest exporter of crude oil in the world, with a daily average of 6.6 million barrels compared to 7.5 million barrels per day in normal circumstances, but the Kingdom participates in the OPEC+ alliance agreement to reduce production.
Last year, oil recorded its first annual loss since 2020 as production expanded from outside OPEC+, and traders looked forward to a slowdown in demand growth, including from the main importer, China.