Oil at four-year low after Saudi Arabia cuts US prices

Front-month Brent crude touches a low of $82.08, its weakest since October 2010

OPEC’s secretary general last week said production next year would not vary much from 2014

OPEC’s secretary general last week said production next year would not vary much from 2014

 

Brent crude oil fell to a more than four-year low near $82 a barrel on Tuesday, after top oil exporter Saudi Arabia cut sales prices to the United States.

Front-month Brent crude touched a low of $82.08, its weakest since October 2010, and was down $2.10 at $82.68 a barrel.

US light crude was down $2.20 at $76.58 a barrel. It touched a session low of $75.84, its weakest since October 2011, as its discount to Brent hovered around $6.

The Brent price plunged more than 50 cents below last month’s low of $82.60 before recovering.

The world’s top exporter increased its December sales prices, relative to benchmarks, to Asia and Europe on Monday, but lowered prices to the United States, a smaller export market.

The absence of signs that the Organization of the Petroleum Exporting Countries (OPEC) could curb output in a well supplied market also continued to weigh on sentiment.

The oil cartel will meet on November 27th in Vienna to discuss its output targets for next year.

Members Venezuela and Ecuador are working on a joint proposal to defend oil prices, but the United Arab Emirates oil minister said the group is “not panicking.”

OPEC’s secretary general last week said production next year would not vary much from 2014, and members Iran and Kuwait have said a cut in output at the next meeting was unlikely.

There is a growing lobby in the United States to lift a 40-year ban on US crude exports which if successful could ease a supply glut in the Atlantic Basin.

A stronger dollar was also weighing on oil prices, making the commodity more expensive for buyers using other currencies. The dollar touched a four-year high on Monday, before slipping back slightly on Tuesday.

Reuters