By Peter Nurse
Investing.com — Oil prices retreated Tuesday, continuing the previous session’s selloff after Saudi Arabia’s sharp cut in crude prices and the disappointing U.S. jobs report raised doubts about the strength of the global economic recovery.
By 9:30 AM ET (1330 GMT), futures were down 1.1% at $68.52 a barrel, while futures were down 0.4% at $71.96 a barrel.
U.S. Gasoline RBOB Futures were down 1.4% at $2.1245 a gallon.
Saudi Aramco (SE:) cut its October official selling prices for all its crude grades sold to Asia over the weekend by at least $1 a barrel, pointing to demand worries in the world’s top-importing region.
“While a decrease was expected by the market, the cut was larger than anticipated,” said analysts at ING, in a note. “A combination of increased Saudi output and soft demand in Asia appears to have contributed to the decrease.”
This followed data from the U.S. showing that rose by only 235,000 in August, the smallest rise in seven months, and considerably weaker than the over 1 million jobs added the previous month.
Not even strong export data from China, released earlier Tuesday, helped the mood, as the trade numbers showed that imports of crude were still running at more than 1 million barrels a day below February levels in August.
That said, oil prices still remain at relatively elevated levels, underpinned by continued outages of U.S. supply from Hurricane Ida, with more than 80% of oil production in the Gulf of Mexico remaining shut more than a week after its impact.
Oil prices around $65-$75 a barrel are “comfortable” for consumers, said Vagit Alekperov, the head of Lukoil, Russia’s second-largest oil producer, in a newspaper interview published Tuesday. He added that the OPEC+ group of leading oil-producing nations was striving to maintain that price range by regulating output.
This follows the Organization of the Petroleum Exporting Countries and allies, a group known as OPEC+, sticking last week to its plan to add 400,00 barrels per day to the market over the next few months.
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