Saudi oil price fall: How it affects global oil supply

Oil prices have fallen by as much as 50 per cent since last week, prompting worries of a global oil glut.

In the latest drop, the US benchmark Brent crude was down 54 cents at $51.94 a barrel, its lowest since June.

Saudi Arabia’s oil ministry said it expects the price drop to continue over the coming weeks.

The kingdom’s state oil firm Aramco said on Thursday that crude output fell by more than 6 million barrels per day, a quarter of the level it saw in June, which is well below the 7.5 million bpd target the government has set for the year.

The fall in oil prices has led some companies to cut back on production in the US.

Saudi Aramco, which operates Saudi Aram, is the largest exporter of oil in the world, accounting for around 20 per cent of global output.

Saudi Arabians are among the largest buyers of US crude oil, buying more than 90 per cent more in 2016 than in 2015, according to data from Bloomberg New Energy Finance.

Aramco also said it had reduced the number of its workers by 30 per cent, from more than 400,000 in 2015 to less than 200,000.

Reuters contributed to this report.