Oil Prices Dip as Saudi Aramco Cuts Prices for Asian Buyers

Oil markets are experiencing a downturn amid reports that oil is flowing freely through the Strait of Hormuz. Brent oil is testing the psychologically significant $100 level, with traders largely ignoring the potential risks of escalation in the region. Meanwhile, Saudi Aramco has reduced prices for Asian buyers by up to $5 per barrel below the regional benchmark, signaling an increase in oil flow through the Strait of Hormuz.

Natural gas, on the other hand, is gaining momentum as its rebound continues despite low demand. The commodity is currently testing resistance levels at $3.00, $3.05. If natural gas manages to settle above $3.05, it could head towards the next resistance at $3.20, $3.25. However, if it fails to maintain this level and settles back below $3.00, it may target the 50-day moving average at $2.91, with further support at $2.75, $2.80.

WTI oil is retreating as traders focus on Saudi Arabia’s recent moves. The country has cut prices for its oil exports to Asia and is preparing for potential conflict in Yemen. Reports suggest that Saudi Arabia has fully restored the flow of oil through the East-West pipeline, which bypasses the Strait of Hormuz. Meanwhile, Iran has not loaded any oil cargo last month due to a naval blockade of its ports, raising the risks of escalation.

If WTI oil settles below the support level at $88.50, $89.00, it could drop further to $84.50, $85.00. The Relative Strength Index (RSI) indicates there is room for further downside momentum if the right catalysts emerge. In contrast, Brent oil could target support levels at $97.00, $97.50 if it settles below $100.00, with further downside to the 50-day moving average at $94.84. On the upside, Brent oil needs to settle back above $102.00 to gain momentum, potentially targeting $109.00, $109.50.