As of 4:07 GMT, March futures for Brent crude oil decreased by 0.95 percent reaching $48.33 per barrel, while the price of West Texas Intermediate (WTI) light sweet crude oil futures for March delivery dropped by 1.13 percent to $45.08 per barrel.
The sixth king of Saudi Arabia, Abdullah Bin Abdulaziz Al Saud, died on Friday at the age of 90 after spending weeks in hospital with a lung infection. His post was taken over by his half-brother King Salman bin Abdulaziz Al Saud, who pledged to continue the political course of his predecessor. In this context, world oil prices have increased, but later continued to drop, as global investors feared oversupply of the oil in the market.
"Crude production needs to slow down first to decelerate the speed of stockpiling, which is seen to be even faster than during the 2008 financial crisis. With Saudi Arabia, the market hardly reacted last week and will remain unchanged as King Salman is known to be very conservative," Bloomberg quoted Hong Sung Ki, a commodities analyst at Samsung Futures Inc. in Seoul, as saying Monday.
The global oil prices started to fall sharply in summer 2014 amid oversupply in the market. Prices dropped further after the Organization of the Petroleum Exporting Countries (OPEC), whose 12 member states account for some 40 percent of world oil output, decided not to cut production in late November.
Saudi Arabia, OPEC's major oil producer, shares the organization's strategy to maintain oil output amid falling prices, in order to keep its market share. Smaller oil producing countries, such as Venezuela, on the other hand, urge the organization to take action and maintain a higher oil price.
