Crude oil prices extended drop on Monday, falling more than 1%, to record its lowest level since July 20, after Saudi Arabia announced the largest price cuts in five months for its oil supplies to the Asian region.

US crude oil futures hit a low of $38.55 a barrel, after opening trading today at $39.42 a barrel, sliding for a fourth consecutive session.

Brent crude recorded its lowest level at $41.54 a barrel, compared to today's open at $42.30 a barrel.

Saudi Arabia, the world's largest oil exporter, has lowered the official selling price for October for Arab Light crude, which it sells to Asia, by the most since May, indicating continued weak demand. Asia is the largest market for Saudi Arabia by region.

In August, the OPEC + group eased production cuts to 7.7 million barrels per day after global oil prices improved from their historic lows caused by the Coronavirus pandemic, which reduced fuel demand.

The world is still having oversupply of oil and fuel despite supply cuts by OPEC and its allies, and government efforts to stimulate the global economy and oil demand. As a result, refineries reduced their production of fuel, prompting oil producers such as Saudi Arabia to lower prices to compensate for lower crude demand.

China, the second largest consumer of crude oil in the world, announced today a decrease in its imports during the month of August by 2.1% from a previous decline of 1.4%, which reflected the weak demand for crude oil by China, which is evident from the weakness of its imports, despite the increase in its exports for the same period, by 9.5%.

The US dollar levels rose slightly against major currencies at the beginning of the week, but it is difficult for this slight increase in the dollar to represent negative pressure on crude oil prices, but the real impact is stemming from the continued weakness of global demand.