Decline in Oil Prices

Oil prices fell by about 1% on Tuesday, as concerns that a slowdown in global economic growth could reduce energy demand outweighed Saudi Arabia's commitment to increase production cuts. Brent crude futures dropped by 42 cents, or 0.6%, settling at $76.29 per barrel, while U.S. West Texas Intermediate crude fell by 41 cents, or 0.6%, to $71.74 per barrel at settlement. Prices rose on Monday after Saudi Arabia announced earlier in the week it would reduce production to about nine million barrels per day in July from around ten million in May. Additionally, Saudi Arabia, the world's largest oil exporter, unexpectedly raised the official selling price of its crude for Asian buyers. However, analysts at Citigroup noted in a memo that it is unlikely the Saudi supply cuts will achieve a "sustained increase in prices" to a range between $80 to $90 due to weak demand, stronger supplies from outside OPEC, a slowdown in economic growth in China, and a potential recession in the U.S. and Europe.