Signs of Oil Glut Weigh on Prices: Bloomberg

Key oil market gauges currently indicate that supply is outstripping demand, despite Saudi Arabia’s pledge that OPEC+ will deliver its output cuts, according to Bloomberg.

• In a sign of market weakness, Saudi Arabia lowered its OSPs to Asia for January by 0.50ct/bbl to 3.50$/bbl over the Oman/Dubai average, according to a price list seen by Bloomberg, marking the first cut in seven months.
• Moreover, OPEC’s decision to further curb output follows an influx of US cargoes, which could flood markets in Asia.
• The voluntary nature of OPEC’s pledge also has left the market with scepticism, since the group has consistently surpassed expectations on output this year, Bloomberg said.
• “The voluntary element of the deal left the markets questioning whether the supply reduction would actually come into effect,” said Fiona Cincotta, financial market analyst at StoneX.