SINGAPORE: Oil prices dropped more than $1 a barrel on Monday, hitting their lowest since July, after Saudi Arabia made the deepest monthly price cuts for supply to Asia in five months.
Saudi Arabia cut the October official selling price for Arab Light crude it sells to Asia by the biggest margin since May. Asia is Saudi Arabia’s largest market by region.
Optimism about demand recovery also cooled amid the coronavirus pandemic. Brent crude was at $41.75 a barrel, down 91 cents or 2.1 per cent, after it earlier fell to $41.51, its lowest since 30 July.
US West Texas Intermediate (WTI) fell 91 cents, or 2.1 per cent, to $38.86 a barrel. Front-month prices initially hit a low of $38.55 a barrel, a level not seen since 10 July.
The world remained flooded with crude and fuel supplies despite OPEC+ supply cuts and government efforts to stimulate the global economy and oil demand. Refiners had to rein in output and producers made deep price cuts again.