Global oil prices have dropped to $71 per barrel, staying below the $75 mark. This comes after Saudi Aramco, one of the world’s top oil companies, reduced prices for its Asian customers. OPEC’s struggles to stabilize the market and weaker global demand are also playing a big role in this decline.
Saudi Aramco lowered its prices for January, setting its Arab Light crude at just 90 cents above the regional benchmark. While prices in Europe and the Mediterranean also saw cuts, North America remained unchanged. These reductions are bigger than expected and come as OPEC delays plans to control production.
OPEC, which manages oil output globally, has reduced its oil demand forecasts four times this year. Weak demand from China and other markets has made it tough to keep prices above $75 per barrel. Now, OPEC is trying to maintain a price floor of $70.
Oil prices have fallen nearly 9% from an October high of $80.35 per barrel.
OPEC cut its 2024 growth estimate to 1.93 million barrels per day (bpd), down from 2.03 million bpd, and its 2025 estimate to 1.54 million bpd.
Despite brief recoveries in June and October, oil prices have mostly been on a downward trend this year.
Saudi Aramco, the fourth-largest company globally with $494 billion in revenue for 2024, remains a major force in the oil market. However, its decision to lower prices for Asia has contributed to this price drop.
With OPEC adjusting forecasts and demand staying low, oil prices may continue to face pressure. The future will depend on how global producers respond to these challenges.
