Oil started the week with a decline

Oil fell after Saudi Arabia slashed official selling prices for all regions, underscoring a worsening outlook that left concerns about tensions in the Red Sea and supply disruptions in Libya behind. Global benchmark Brent fell below $78 a barrel after rising 2.2% last week, while U.S. crude was around $73. State producer Saudi Aramco cut the price of its flagship Arab Light for Asia by a more-than-expected $2 a barrel amid persistent weakness in the global crude market. Oil is coming off its first annual decline since 2020, driven by losses from rising supplies from outside the OPEC+ cartel and concerns that demand growth, including from top importer China, will slow this year. With 2024 yet to begin, Wall Street expects more challenges for crude and major banks are already cutting their outlooks for the year. “Supply disruptions and Middle East tensions continue to provide some support. But in the absence of a Middle East upturn, we suspect the upturn is limited given the relatively comfortable first half of 2024,” said Warren Patterson, head of commodity strategy at ING Groep NV. In the Middle East, container giant AP Moller-Maersk A/S will continue to divert ships from the Red Sea following a series of ship attacks by Houthi rebels. Meanwhile, US Secretary of State Antony Blinken warned that the Israel-Hamas war could escalate into a full-scale regional conflict. The Libyan National Petroleum Corporation also declared force majeure after the Sharara oil field was closed by protesters. The NOC said the closure of the country’s largest field had halted supplies to the Zawiya terminal