Oil prices sank further on Monday as Saudi Arabia lowered their crude oil’s official selling prices in spite of their deal with the OPEC to help raise prices through production cuts.
State oil giant Saudi Aramco cut their official selling prices for their flagship Arab crude bound for Asia for June by $0.40. The Saudi oil company has also cut its crude pricing for all varieties in Asia for June including their Super Light, Extra Light, Medium, and Heavy according to reports with the Super Light due to be lowered by as much as $0.70 while the Heavy crude is to be cut the smallest by $0.20.
US Futures Records Two Week Losses
Meanwhile, U.S. crude futures have now recorded losses for the past two weeks and is set to sink further according to analysts in relation to the relationship of oil prices and past GDP data.
On Friday, the Commerce Department reported that the U.S. economy is now growing at an annual rate of 0.7% in the first quarter but still missing analyst expectations of a growth at 1.2%.
The weak economic growth has raised concerns regarding the country’s energy and fuel consumption that affects crude oil prices.
Oil Price Movement
As oil prices recorded their lowest close in the past five weeks on Monday led mostly by the rising U.S. crude futures that have previously dampened the OPEC’s continuous efforts in capping growing global supply and stabilize oil prices.
Earlier this week, OPEC Secretary-General Mohammed Barkindo suggested that the supply cuts
The decline in oil prices has given a bearish outlook for crude oil during the month of May following the second consecutive monthly decline.
June West Texas Intermediate crude fell 1% or 49 cents, closing at $4.84 per barrel on the New York Mercantile Exchange while the WTI lost around 2.5% in April.
June gasoline in the Nymex fell by 1.4% at $1.527 per gallon while the June heating oil lost 1.3% to $1.488 per gallon.
London’s ICE crude futures exchange settled 1% or 53 cents lower to $51.52 per barrel. The two crude benchmark recorded their lowest prices for the most-active contract since last March.
Light crude futures are now trading at around $48.66 from previously trading at $49.32. The slump started earlier in April on news of rising gasoline inventories, rising US crude futures, and the tension between the United States and North Korea.
US oil prices, for instance, fell below $50 per barrel to a three-month low last month as US stockpiles spiked sending traders out but have rallied previously rallied on the dollar’s decline and on hopes of the OPEC deal being extended.
According to analysts, any extension of the global production cut originally agreed between OPEC countries and a number of non-OPEC members including Russia would be enough to push back prices to normal levels. A meeting this coming May 25th would be held to decide whether the agreement to cut production by 1.8 million barrels a day last year would be extended.