NEW YORK: Oil prices were little changed on Monday, trading around pre-Iran war levels as Saudi Arabia slashed its official selling prices, OPEC+ approved another production target increase starting in August, and exports through the Strait of Hormuz recovered further.
Brent crude futures, which hit a four-year high above USD126 in late April, were trading at USD72.19 a barrel at 11:26 a.m. ET (1626 GMT), up 7 cents, or 0.1 percent. US West Texas Intermediate crude was at USD68.81 a barrel, up 12 cents, or 0.2 percent.
There was no settlement for WTI on Friday as US markets were closed for a public holiday. Both contracts were little changed last week after mostly falling over the past month back to levels last seen in late February, prior to the start of the war that severely disrupted global energy flows.
“The downward move is still influenced by earlier stranded tankers managing to exit the Gulf, resulting in an increase in oil on water,” UBS analyst Giovanni Staunovo said. Investors kept a close eye on talks between the US and Iran over the fate of shipping through the Strait of Hormuz while keeping tabs on the recovery in Gulf oil exports.
The United Arab Emirates raised its crude output to near record highs above 3.8 million barrels per day in June after it quit OPEC to escape production caps, two people familiar with production data said on Monday. Saudi Arabia has set the official selling price for its flagship Arab Light crude to Asia in August at USD1.50 a barrel below the Oman/Dubai average, marking the biggest monthly cut in the price since Reuters records began in 2003.
Abu Dhabi National Oil Company (ADNOC) has also been selling crude through tenders at discounted prices, traders told Reuters.
“It is increasingly looking like the Gulf producers are gearing up for a price war,” said Robert Yawger, director of energy futures at Mizuho.