Saudi Arabia shocked the market earlier in the week after lowering oil prices to Asian buyers in October while prices remained unchanged for Europe and the United States.
Oil giant Saudi Aramco told customers in a statement on Sunday that it would lower the official October selling price (OSP) for all grades of crude oil sold to Asia, to at least $ 1 a barrel.
According to a Reuters survey among Asian oil mills, these price cuts are larger than the market expected to drop just around $ 0.20 to $ 0.40 cents a barrel.
Following these cuts, it indirectly signifies weakness in high demand and supply in Asia.
Oil prices fell following the statement, pushing U.S. Brent and WTI crude futures down 1.2% on Monday, trading at $ 71.72 a barrel and $ 68.44 a barrel during the European session, respectively.
Meanwhile, concerns about slower fuel demand in the U.S. are growing as a result of the coronavirus resurgence and weak employment data readings point to a slowdown in the labor market recovery.
