LONDON: Brent crude oil fell below $69 a barrel on Thursday after Saudi Arabia announced deep cuts in selling prices for Asian and U.S. buyers, a week after refusing to support OPEC output cuts.
The kingdom's state-owned oil company cut its January price for its Arab Light grade for Asian customers by $1.90 a barrel from December to a discount of $2 a barrel to the Oman/Dubai average.
The Arab Light Official Selling Price to the United States was set at a premium of $0.90 a barrel to the Argus Sour Crude Index (ASCI) for January, down 70 cents from the previous month.
"(The) Saudis are making it clear they don't want to lose market share," Richard Mallinson, an analyst at consultancy Energy Aspects, told the Reuters Global Oil Forum.
Brent was down 60 cents at $69.32 a barrel by 1440 GMT, up from a low of $68.81 earlier in the session. U.S. crude was down 90 cents to $66.48 a barrel, having fallen to 66.09 in early New York trade.
Oil prices have been volatile since the Organization of the Petroleum Exporting Countries (OPEC) said last week it would not lower output despite an oversupplied market.
Brent hit a five-year low below $68 a barrel on Monday after averaging around $110 a barrel in 2011 to 2013.
More than 30 economists and analysts polled by Reuters after OPEC's Nov. 27 meeting forecast an average Brent price of $82.50 a barrel in 2015, down $11.20 from the previous poll. This was the biggest downgrade in average forecasts since the global economic crisis in 2008.
The Wall Street Journal, citing people familiar with the situation, reported on Wednesday that Saudi Arabia now believes oil prices could stabilise at around $60 a barrel.
Olivier Jakob, oil analyst at Petromatrix in Zug, Switzerland, said Saudi Arabia was targeting a $60 to $70 price range and the kingdom hoped a fall below $60 would be brief.
Fellow OPEC member Nigeria lowered its oil price budget assumption on Thursday by 11 percent to $65 a barrel in its 2015 budget, down from $73.
"There is a very real danger of the downtrend re-asserting itself," said Robin Bieber, director and technical analyst at brokerage PVM Oil Associates. "Treat the market with maximum care and keep exposure limited until the next leg is clear."
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