Oil prices dipped to $72.04 per barrel for Brent crude and West Texas Intermediate sank to $68.73 a barrel. This drop comes after Saudi Arabia announces it is cutting oil prices by $1 for its Asian customers. The drop in oil prices in the international markets were limited due to potential supply shortages after many oil production platforms and refineries in the path of last week’s Hurricane Ida remained offline.
Saudi Aramco told its customers that October prices for all crude grades sold to Asia will be reduced by at least $1 a barrel, this was larger than expected. Asian customers are Saudi Aramco’s largest customers.
The decline in crude futures also indicated new fears after the latest jobs report shows a slower and weaker economic recover than was hoped for in the United States. This slower economic activity means lower demand for oil and gas.
The U.S. is releasing 1.7 million barrels of oil and 1.99 billion cubic feet of natural gas from the nation’s strategic petroleum reserves in an attempt to supply the U.S. with oil until the Gulf coast oil production platforms and refineries can restart. While the Louisiana refineries and off-shore oil production platforms make up a significant amount of oil and refined products in the U.S., the effects of them being down is limited because there are far more oil platforms and refineries in Texas.