Crude Oil Drops Below USD35 As Saudis Slash Prices
Crude oil futures plunged near the lowest in eleven years Wednesday morning, as Saudi Arabia slashed prices for European customers in a bid to hurt Iran.The Saudis are desperate to retain market share as Iranian oil comes online following years of heavy sanctions.The move comes against the backdrop of rising tensions between the two OPEC nations. Saudi Arabia cut diplomatic ties with Iran after the Saudi embassy in Tehran was stormed by Shiites angry over the execution of a cleric.
US WTI crude oil was down USD1.12, or 3%, to 34.86 a barrel.
Concerns about demand from China has also hit crude oil prices.
There was little reaction to news that US crude inventories fell by 5.6 million barrels, according to the American Petroleum Institute.