ADVERTISEMENT

ADVERTISEMENT

Oil hits four-year low near $82 after Saudi Arabia cuts U.S. prices

LONDON, Nov 4 (Reuters) - Brent crude oil fell to its lowest in more than four years near $82 a barrel on Tuesday, after top oil exporter Saudi Arabia cut sales prices to the United States.

LONDON, Nov 4 (Reuters) - Brent crude oil fell to its lowest in more than four years 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 $2.25 at $82.53 a barrel by 1155 GMT.

U.S. light crude was down $2.15 at $76.63 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 fell more than 50 cents below last month's low of $82.60 before recovering.

---

ADVERTISEMENT

  • Saudi Arabia cuts oil prices for U.S. customers
  • Brent and WTI touch respective 4-year and 3-year lows
  • WTI slips into contango, adding pressure to prices

---

"We've been seeing some technical stop loss selling because the price has reached new lows," said Christopher Bellew, a broker at Jefferies in London.

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.

"This is mixed news, and the fact that the positive angle has not made an impact shows that market sentiment is very negative at the moment," said Eugen Weinberg, head of commodities research at Commerzbank in Frankfurt.

Daniel Ang of Phillip Futures said in a note that the move "signaled Saudi Arabia's intention to fight for U.S. market share and could even show its intention to squeeze U.S. shale producers."

But analysts at JBC Energy said the pricing reflected market fundamentals and did not have a political motive.

"We would strongly advocate against interpreting every month's OSP publication in the context of 'price war' and 'market share battle' stories," they said in a note.
U.S. SUPPLY GLUT

A growing supply glut in the United States has led more than a dozen oil producers to create a new lobby group, Producers for American Crude Oil Exports (PACE), which seeks to end the country's 40-year ban on crude exports.

ADVERTISEMENT

U.S. commercial crude stocks likely rose last week, according to a preliminary survey by Reuters, which if confirmed will be the fifth consecutive weekly stock build.

Industry group the American Petroleum Institute will release its inventory data at 2130 GMT, and the Energy Information Administration will release official figures on Wednesday.

U.S. crude futures slipped into contango on Monday for the first time since January. A contango structure indicates that front-month prices are lower than prices further forward.

"Contango makes a structure unattractive for re-investors because they make a loss when each month rolls over," said Tamas Varga, analyst at PVM Oil in London.

The absence of signs that the Organization of the Petroleum Exporting Countries (OPEC) could curb output at an upcoming Nov. 27 meeting also weighed on prices.

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 an output cut at the meeting was unlikely.

"The market sentiment will stay negative until OPEC appears to be unified," said Commerzbank's Weinberg. "Everybody is blaming each other but nobody is willing to cut."

What To Read Next
Fundraising is underway to move the giant ball of twine from the Highland, Wisconsin, home of creator James Frank Kotera, who died last month at age 75, 44 years after starting the big ball.
Inmates in-custody in the Mille Lacs County jail in Milaca, Minnesota
Inmates in-custody in the Hubbard County jail in Park Rapids, Minnesota
Inmates in-custody in the Todd County jail in Long Prairie, Minnesota