This decrease is primarily attributed to concerns that escalating conflicts in the Middle East might disrupt global raw material supplies.
Contributing to this downward trend, Saudi Arabia announced plans to lower oil prices across all regions in February. As per state-owned Saudi Aramco's statement on Sunday, prices for Asian buyers will see a reduction of $2 per barrel.
As of 7:10 a.m., the price of March futures for Brent crude on the London ICE Futures exchange stood at $77.88 per barrel, down by $0.88 (1.12%) from the previous trading session's close. On Friday, Brent contracts had risen by $1.17 (1.5%) to $78.76 per barrel.
Meanwhile, February futures for WTI crude on the New York Mercantile Exchange (NYMEX) decreased by $0.9 (1.22%) to $72.91 per barrel. The previous trading session saw these contracts appreciating by $1.62 (2.2%) to $73.81 per barrel.
Overall, Brent and WTI experienced weekly increases of 2.2% and 3%, respectively, as noted by Market Watch.
Traders are closely monitoring developments in Libya, where oil production at the Ash-Sharar field has been halted due to protests, and the Red Sea region, following attacks on commercial vessels by Yemeni Houthis.
Warren Patterson, Head of Commodities Strategy at ING Groep NV, indicates that while these factors bolster the oil market, the scope for price growth remains limited. He cites a relatively balanced supply and demand scenario in the market for the first half of 2024, barring any major escalations in the Middle East.
