OXY - Saudi Arabia Just Crushed U.S. Crude Oil Prices Again
The crude oil recovery has hit its first big speed bump.
The surge in COVID-19 cases in many parts of the world, the end of a weak peak-summer demand season in the Northern Hemisphere, and the cessation of record crude purchases by Chinese refiners in the second quarter have created a chain of events that has crude oil futures cratering on Sept. 8. At this writing, Brent crude is down 4.5% to $40.13 per barrel, while West Texas Intermediate futures are down a brutal 7% to $37.02 per barrel.
Today's massive sell-off comes after news over the weekend that Saudi Arabia was cutting crude prices for October shipments to both Asian and U.S. refining customers. This marks the first time since early in 2020 that the petro state has lowered prices for crude shipments to the U.S., putting its selling price to Asia back below the country's target benchmark as Chinese shipments weaken after months of stockpiling.