Saudi Price Cuts Jolt Oil Market Amid Rising Supply, Global Demand Worries

Key Highlights:

• Price Crash: Brent crude fell to $63.01, its lowest in four years, after Saudi price cuts and OPEC+ supply hike.
• Soft Demand: Global demand outlook weakens, with gasoline futures hitting lows not seen since February.
• Investor Caution: Market sentiment remains bearish amid US-China tensions and recession fears. 
• Product Prices: Refinery Bitumen at ₹48,612/MT (Panipat), Base Oil at ₹68/kg (Delhi), Hydraulic Oil at ₹87/litre (Bhiwadi).

Domestic Petroleum Product Prices

• Refinery Bitumen (VG30) is available in Panipat at ₹48,612 per metric ton. Roadgrip Bitumen Emulsion (RS 1) is priced at ₹33,810 per metric ton in Mathura. In Delhi, Base Oil (SN150) is being offered at ₹68 per kilogram. Fuel Oil (Virgin 180cST Furnace Oil) is available in Mundra at ₹48.5 per kilogram. 
• Lubriedge Rubber Process Oil (Paraffinic 245) is priced at ₹72 per litre in Delhi. In Bhiwadi, LubriEdge Hydraulic Oil (Hydraulic Oil 68) is available at ₹87 per litre, LubriEdge Gear Oil (Gear Oil 150) at ₹115 per litre, LubriEdge Rust Preventive Oil (Water Displacing Type - WDM) at ₹122 per litre, and LubriEdge Metal Working Fluid (Soluble Cutting Oil) is priced at ₹112 per litre.

Petroleum Demand-Supply: Global Crude Oil Market Turmoil

• The oil market is witnessing heightened volatility as demand-side concerns clash with unexpected supply-side developments. Saudi Arabia has slashed the official selling price of its flagship Arab Light crude for Asia by the steepest margin in over two years, triggering a global price slide. 
• This price reduction, aimed at maintaining market share, came on the heels of a surprise OPEC+ decision to raise production levels—adding further downward pressure. 
• The timing has intensified market concerns of a looming supply glut amid softening global demand signals. Key indicators, like the Brent crude spread flipping into contango, suggest oversupply and weak near-term demand. 
• Meanwhile, oil product markets are also showing weakness, with gasoline futures falling to their lowest levels since February. Investor risk aversion is high, with bearish sentiment spilling over into broader commodity and equity markets. 
• Ongoing trade tensions, especially between the US and China, along with geopolitical uncertainty, are contributing to the bearish mood. A resurgence in fears of a global economic slowdown has further clouded the outlook for energy consumption and oil price recovery.

Petroleum News: OPEC+ Moves Spark Price Shock

• Oil prices tumbled as Saudi Aramco unexpectedly slashed crude prices for Asian buyers, with Brent falling nearly 4% to $63.01 and WTI to $60.63. 
• This marks the lowest Brent level in four years. The move followed OPEC+’s surprise production hike, amplifying fears of oversupply. 
• Global investor sentiment has turned negative due to heightened US-China trade tensions and recessionary fears. 
• Gasoline futures also dropped nearly 3% in New York, mirroring weak demand and ample supply. 
• Saudi Arabia’s pricing cuts extended beyond Asia, reaching the US and Europe, albeit at smaller margins. 
• This decision comes amid international political pressure, including from the US, urging lower oil prices to combat inflation and challenge Russia economically.

Expert Opinion: Bearish Momentum to Continue

The oil market is expected to remain under pressure in the short term. With rising supplies and a softening demand outlook, prices may trend lower unless there is a major geopolitical trigger or OPEC+ policy shift. 

Market participants are cautious, awaiting any potential intervention or reassessment from key producers. Until then, sentiment is likely to stay bearish, especially with risk-averse investors steering clear of volatile assets. Attention now turns to upcoming economic indicators and potential policy signals from the US and China.