Brent crude held above $83 a barrel after slumping more than 7% last week to post the biggest decline since February. West Texas Intermediate was close to $78. State-owned Saudi Aramco raised the June official selling price of its flagship Arab Light grade by 90 cents to $2.90 a barrel above benchmark prices. That compares with an increase of 60 cents forecast in a Bloomberg survey.
Oil tumbled last week as risks of conflict in the Middle East eased, paring the commodity’s year-to-date gain. OPEC and its allies are widely expected to press on with supply cuts in the second half of this year when they meet next month. Ahead of that, laggards Iraq and Kazakhstan have outlined plans on how they will curb flows to bring output in line with already-agreed-upon quotas.
In the Middle East, talks over the weekend about a potential truce between Israel and Hamas broke up inconclusively. Options markets, meanwhile, have shed the risk premium as fears of a wider regional war dissipate. Brent option skews are at their most bearish in nearly two months, with the discount of calls to puts at the widest since March.
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