File - A general view shows the Saudi Aramco oil facility in Dammam city, 450 kms east of the Saudi capital Riyadh, 23 November 2007. AFP PHOTO/HASSAN AMMAR
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Saudi Arabia is signaling that it's ready for a price war with other OPEC members that would deepen oil's biggest slump in more than two years, according to Commerzbank AG and Citigroup Inc.Saudi Aramco, the state-run oil producer of the world's biggest exporter, cut prices on Oct. 1 for all its exports, reducing those for Asia to the lowest level since 2008 . The move suggests that the biggest member of OPEC is prepared to let prices fall rather than cede market share by paring output to clear a supply surplus, according to Commerzbank.It made the biggest contribution to OPEC's production cuts of almost 5 million barrels a day in 2008 and 2009 as demand contracted amid the financial crisis.It made the biggest cut to its production in 20 months in August, according to data the country submitted to OPEC.Rather than signaling an impending fight for market share in Asia, the Saudis are probably adjusting for rising freight costs and falling prices of Atlantic Basin crudes, he said.
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