WASHINGTON (dpa-AFX) - Oil prices fell sharply on Monday, as Saudi Arabia's decision to cut prices offset concerns about an escalation in the Middle East conflict.
West Texas Intermediate Crude futures for February ended down $3.04 or about 4.4% at $70.77 a barrel.
Brent crude futures settled at $76.12 a barrel, down $2.74 from the previous close.
Saudi Arabia cut oil prices sharply to Asian markets, pushing the rates to the lowest level in 27 months, amid competition from rival suppliers and concerns about supply overheating.
Saudi Aramco slashed the official selling price (OSP) for February-loading Arab Light to Asia by $2 a barrel from January to $1.50 a barrel over Oman/Dubai quotes.
A report from Reuters said the output from the Organization of the Petroleum Exporting Countries (OPEC) rose 70,000 barrels per day in December to 27.88 million barrels per day.
On the geopolitical front, U.S. Secretary of State Antony Blinken warned that the conflict in Gaza could 'easily' spill over into a full-blown regional conflict.
Israel struck Hamas and Hezbollah terror facilities in Khan Yunis and Lebanon in overnight strikes, the Israel Défense Forces said earlier today.
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