Oil prices and related exchange traded funds could continue to slip further as Saudi Arabia in a counter-intuitive move wants to keep pumping oil and defend its market share.
WTI crude oil currently trades at $91.3 per barrel while Brent crude is hovering around $93.8 per barrel.
Signaling that oil investors are becoming weary of the continued weakness, oil ETFs saw greater redemptions over September. BNO experienced $5.8 million in outflows over September while USO lost $115.8 million, according to ETF.com data. [Investors Turn Sour On Commodity ETFs]
Now, Saudi Aramco has sharply reduced its official oil prices for Asian customers in November, potentially indicating that the world’s largest exporter is trying to undercut other countries and compete for a greater slice of the crude oil market, Reuters reports.
Saudi Arabia’s move is counter to expectations that it would further cut 9.6 million barrels per day in production to help support faltering oil prices, CNBC reports.
In contrast, the Organization of Petroleum Exporting Countries, or OPEC, is calling for higher prices after Brent crude oil dipped to a two-year low.