Brent Crude Oil Falls Below $70 On Saudi Discount

Brent crude oil was steady at $69.21 after falling on Thursday due to Saudi Arabia’s announcement of discounts for its Asian and U.S. customers. The commodity traded at $70.00 at $8:30 GMT on Friday morning as a week of volatile trading ended.

After blocking OPEC from implementing a supply cut that would boost prices, the kingdom announced on Thursday that it would discount crude prices for both Asia and the United States. Many saw the decision to discount as an indication that Saudi officials are looking to defend the nation’s market share.

Also weighing on crude prices was news that Libya’s largest oil field was nearly ready to reopen after being blockaded for months due to conflict within the North African nation. CNBC reported that the El Sharara pipeline had been cleared and should be opening soon. The Sharara oilfield produces 300,000 barrels per day, something that will be a large contributor to the growing global supply glut once restarted.

However, the European Central Bank’s decision not to ease put a floor beneath prices as the uncertainty over the bank’s next move helped weaken the dollar. ECB President Mario Draghi said the bank was not prepared to ease in December, and that it would make its decision regarding stimulus early next year. Draghi cited crumbling oil prices as one of the reasons the governing council had chosen not to act, saying that if the commodity’s price continues to drop, the region’s inflation could drop even more, something that could prompt the bank to raise interest rates rather than ease further.