WTI falls more than 4% due to Saudi Arabia's price cut

• Sharp fall in WTI caused by Saudi price cuts to Asian markets, amid the increase in oil production by some OPEC members.
• Geopolitical tensions in the Middle East initially boosted oil prices, but escalating supply mitigates concerns.
• US diplomatic efforts intensify in the Middle East as the conflict affects global shipping and oil market sentiments.

He West Texas Intermediate (WTI) fell more than 4% on Monday as Saudi Arabia implemented price cuts, while the Organization of the Petroleum Exporting Countries (OPEC) countered supply concerns amid geopolitical tensions in the Middle East. At the time of writing, US benchmark crude oil is trading at $72.21 per barrel, representing a loss of 4.63%.

The US benchmark oil fell to $70.16 due to concerns over the conflict in the Middle East

Since the beginning of the year, WTI has risen 2% due to the risks of an escalation of the conflict in the Middle East between Israel and Hamas. Attacks by Yemen's Houthis on ships in the Red Sea propped up oil prices.

Oil prices fell on rising supply as crude oil production increased in some countries, led by Angola, offsetting continued cuts by Saudi Arabia and other OPEC members. Therefore, that prompted Saudi Arabia to cut prices to Asian customers to their lowest level in 27 months, according to Reuters.

Meanwhile, the current crisis in the Middle East attracted the attention of US Secretary of State Anthony Blinken, who on Monday held talks with Arab leaders to redouble efforts for a diplomatic solution to the Gaza war so that it does not continue to spread. .

However, the conflict is already weighing economically with rising sea freight rates as most ships avoid sailing through the Red Sea.

WTI Price Analysis: Technical Perspective

Monday's oil drop took prices to their daily low of $70.19, but lack of intervention from sellers led crude to recover to $71.00, which could pave the way to test the 50-day moving averages. (DMA) at $75.06. Once surpassed, the next stop would be $76.00, followed by the 200-DMA at $77.87.