TEMPO.CO, Jakarta - Saudi Arabia's decision to cut oil prices has sent global prices tumbling to a two-year low on Thursday local time (Friday morning, Indonesia time).
Analyst are saying that Riyadh has been attempting to undercut market prices to retain its' market share - by posting its' fourth consecutive price reduction in the past four months - which is slowly being eaten away by other Organisation of Petroleum Exporting Countries (OPEC) members from other regions, as reported by AFP.
In New York, the prices for November deliveries of the light sweet crude oil (also known as the West Texas Intermediate - WTI) fell back to US$88,18 per barrel - its' lowest point since 23 April 2013 - before bouncing back to close slightly higher at US$91,01 from its' position at the end of trading on Wednesday.
In London, the prices for November deliveries of the Brent crude oil fell to US$91,55 per barrel - down its' prior level last seen in June 2012, before rebounding to US$93,42 per barrel, or 74 cents below its' closing position on Wednesday.
Andy Lipow from Lipow Oil Associates said that OPEC data suggests that the world's oil producers have increased their production rate since last months.
"Prices fell because there is an abundance of supply from Libya, Russia and Kurdistan - which is exacerbated by Saudi's attempt to maintain its' market share by undercutting the already-falling prices," said Lipow.
It has been reported that Saudi Arabia is planning to scale back its' oil production in an attempt to reduce the surplus and maintain global sale prices.
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