Oil prices fell about $1 on Monday as the world’s top oil exporter Saudi Arabia cut crude contract prices for Asia this weekend which reflected demand concerns and increasing global supply in the crude oil market. 

November Brent crude futures fell 98 cents (1.4%), to $71.64 a barrel while U.S. West Texas Intermediate crude for October was at $68.34 a barrel, down 95 cents (1.4%).

Saudi state oil major Saudi Aramco said in a statement on Sunday that the company will cut October official selling prices for all crude grades sold to Asia, by at least $1 a barrel. 

Apart from the price cuts, the global oil supplies are increasing as Organization of the Petroleum Exporting Countries and their allies (OPEC+) is raising oil output by 400,000 barrels per day between August and December. 

The USA government is also releasing oil from its strategic petroleum reserves as the production from the Gulf Coast struggled to recover. This has also added to the increasing global supplies and the falling prices. 

As per ChemAnalyst, “with the OPEC+ continuing with its plan of raising output on a monthly basis and weak demand from China and USA amid pandemic and Ida related slowdown fears, Saudi Arabia will be looking forward towards capturing a major market share in Asia, hence the prices are likely to remain under pressure.”