Oil flat with Saudi Arabia cutting its key Oil price

• WTI Oil drops back below $74, under important support.
• API overnight print was double the previous build. 
• The DXY US Dollar Index sells off further and snaps below 101.

Oil prices are flat whilst residing below $74 with some downside pressure building. Saudi Arabia has cut its key Oil price by $1.25 per barrel for deliveries in Asia as of February. The news comes not from Saudi Aramco itself, but from three independent refiners in Asia who closed recent contracts. 

The US Dollar (USD) meanwhile is back in green numbers on this very last trading day of 2023, adding a bearish bias to Dollar-denominated Oil. The turnaround comes on the back of still steady tight Jobless Claims in the US in both the continuing and initial Claims. This is reining in rampant interest-rate cutting speculation. Meanwhile traders are cleaning up their trading sheets and are closing their US Dollar short positions, which is triggering a demand of the Greenback in order to close off those positions. 

Crude Oil (WTI) trades at $72.14 per barrel, and Brent Oil trades at $77.55 per barrel at the time of writing. 

Oil News and Market Movers: Aramco undercuts crude prices

• Saudi Aramco has offered discounts on its February prices by $1.25 per barrel. The discounts are applicable on their Asian sales. 
• US Crude inventories took a nosedive move of 7.11 million barrels on Thursday. The biggest one-week drawdown since August. 
• The Pentagon is trying to provide assurances for shipping companies to pass via the Red Sea and Suez Canal again. 
• Russia has launched a new missile attack on Ukraine, targeting key cities in the country with heavy casualties. 

Oil Technical Analysis: EIA under pressure from US Oil dump

Oil prices were unable to jump higher after the biggest drawdown of the US stockpile since August. The fact that Oil cannot advance even on such a chunky decline with the knowledge that the reserve needs to be refilled again, means that markets are more concerned about Saudi Arabia. The fact that the country, one of the OPEC+ countries which bears supply cuts, is selling Crude at a discount, means that OPEC+ is losing further control and grip on the Oil market. 

On the upside, $74 is still holding some importance, although the level has become very chopped up. Once back above there, $80 comes into the picture. Although still far off, $84 is next on the topside once Oil sees a few daily closes above the $80 level. 

Below $74, the $67 level could still come into play as the next support level to trade at as it aligns with a triple bottom from June. Should that triple bottom break, a new low for 2023 could be close at $64.35 – the low of May and March – as the last line of defence. Although still quite far off, $57.45 is worth mentioning as the next level to keep an eye on if prices fall sharply. 

US WTI Crude Oil: Daily Chart