Oil dips below $102 as Aramco cuts Asia prices; Asian stocks rally on Fed relief
Crude eased Monday as a G7 stock release and a surprise Saudi price cut for Asian buyers outweighed weekend supply worries, while Japan’s Nikkei jumped above 70,000.
Oil at the open: Brent futures fell 66 cents, or 0.65%, to $101.59 a barrel at 0240 GMT Monday, and U.S. West Texas Intermediate fell 95 cents, or 1.03%, to $90.12, Oil & Gas Middle East reported, citing Reuters. By 05:32 GMT Brent was at $101.67 and WTI at $90.11, Economy Middle East reported. Brent had settled Friday at $102.25 and WTI at $91.11.
The Saudi surprise: Saudi Aramco set its November official selling price for Arab Light crude to Asia at $5 a barrel below the Oman/Dubai average — $3 lower than October and the widest discount since June 2020 — according to a pricing document reported by Reuters and carried by Business Standard. A Reuters survey had expected a $3 increase. Aramco cut Arab Medium and Arab Heavy for Asia by $5 each, raised prices for northwest Europe and the Mediterranean by $3 after resuming exports from the Red Sea port of Yanbu, and left U.S. prices unchanged. The National, citing Bloomberg, said the cut signals Saudi Arabia may be competing for Asian market share as Middle East oil flows recover. Asian refining sources told Reuters the cuts appeared partly designed to offset very high freight costs, Economy Middle East said.
Supply picture: G7 leaders agreed Friday to release up to 100 million barrels of crude and diesel from emergency stocks over four months, coordinated through the International Energy Agency, Oil & Gas Middle East reported. JPMorgan estimates Middle East crude exports at 17.5 million barrels a day, about 98% of pre-war levels, while fuel product shipments are at about 58%. Brent remains roughly 40% above where it traded on Feb. 27, the day before the war began, the outlet said.
Stocks: Asian markets opened the week higher as softer U.S. hiring data reduced bets on an October Federal Reserve rate hike, Invezz reported. Japan’s Nikkei 225 jumped 2.5% above 70,000 to a three-month high, the Topix gained about 1.2%, and Taiwan’s Taiex rose about 2.6%, led by TSMC, MediaTek and Delta Electronics. The U.S. 10-year Treasury yield eased to around 5.26%, still near multi-decade highs.
What this means: Monday’s first trading reaction to last weekend’s Riyadh fire reports was a small dip, not a spike — emergency stocks and recovering exports are doing more to move prices than the unconfirmed attack claim. A Saudi discount to Asia is a sign the kingdom is fighting for buyers, but oil above $100 and 5%-plus yields remain the main pressures on household costs and stocks.
Sources
- Oil & Gas Middle East — Crude oil prices dip on G7, OSP cut
- Economy Middle East — Oil prices slip to $101.67 as G7 releases 100 million barrels
- Business Standard — Saudi Arabia unexpectedly cuts oil prices to Asia, raises them for Europe
- The National — Saudi Aramco cuts Asia crude prices to six-year low
- Invezz — Asia stocks surge as Fed hike bets fade