WTI has been dumped lower on the Saudi action of lowering prices to the the US.
The latest move has taken us through the 2012 low at 77.27 and now targets the 2011 lows around 75.00
WTI daily 04 11 2014
The Saudi move to cut prices to the US is being netted off with price rises to Asia and the market is more worried about how far the Saudis will go to protect their market share. While the US won’t export oil those that buy OPEC have to suck it up with the price rises.
While it means we could see oil go much lower, the benefits from lower prices shouldn’t be underestimated. Heavy importers will get the benefit which will filter down into the economy. It will be a big drag on inflation though so we’ll have to make sure we watch the differences between the core and headline numbers with greater detail.
