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Oil was down Monday morning in Asia. The black liquid extended its losses after Saudi Arabia cut crude prices for Asia over the weekend amid an uncertain fuel demand outlook.
Brent oil futures slid 1.06% to $71.84 by 11:50 PM ET. Crude oil WTI futures fell 1.02% to $68.58, remaining below the $70 mark.
Saudi Arabia’s Saudi Aramco said on Sunday that it will cut October prices for all crude grades sold to Asia, its biggest customer, by at least $1 a barrel.
“The level of cuts in Saudi official selling prices for Asia was a surprise, and it does not send a great signal to the market regarding current demand dynamics,” ING Groep NV head of commodities strategy Warren Patterson told Bloomberg.
Friday’s disappointing U.S. jobs report showed non-farm payrolls were at 235,000, the smallest gains in seven months, and the unemployment rate was 5.2%, for August. The weak data clouded the fuel demand outlook and delayed expectations for when the U.S. Federal Reserve will begin asset tapering.
However, losses were capped by a U.S. supply that is likely to remain limited as the recovery from Hurricane Ida continues. Production in the hard-hit Gulf Coast region continues its struggle to recover, and release of crude from strategic petroleum reserves continues.
Data from Baker Huges, released on Friday, also said Ida led U.S. energy firms to cut last week the number of oil and natural gas rigs operating during the previous week for the first time in five weeks.
