Oil eases as Saudi offers discounts

Brent crude futures for October delivery fell 33 cents to $40.90 a barrel in London. Trade was subdued, with U.S. markets closed because of the Labor Day holiday.

Saudi Arabia cut prices for October-loading crude to both the United States and Europe, following up on its pledge to give customers all the crude they want to try cool oil prices.

Prices for heavier grades were cut particularly hard, as the kingdom tries to make them more attractive for refiners who are put off by their high yield of low-value fuel oil.

The Saudi pledge has failed to bring prices down much as refiners are not keen to take heavy grades that make up most of the extra Saudi supply. They want lighter grades, which yield more high-value products like gasoline.

Prices are around $4 under a peak hit last month, after big-money speculative funds took profits from a rally that boosted prices 40 percent higher this year.

Source: CNN