“Such an attack may be doomed to failure unless prices remain low for a long time.” “Russia has been dropping hints that the real target is the US shale oil producers, because it is fed up with cutting output and just leaving them with space,” analysts at energy consulting firm FGE wrote in a note to clients Sunday. “Saudi is rolling up its sleeves for a price war.”Īnalysts said that Russia’s refusal to cut production amounted to a slap to US shale oil producers, many of which need higher oil prices to survive. “The signal is Saudi Arabia is looking to open the spigots and fight for market share,” said Matt Smith, director of commodity research at ClipperData. The kingdom slashed its April official selling prices by $6 to $8, according to analysts, in a bid to retake market share and heap pressure on Russia. Saudi Arabia escalated the situation further over the weekend. Crude oil was already stuck in a bear market because of a sharp drop in demand linked to the coronavirus outbreak. The standoff left the oil industry shell-shocked and sparked a 10% plunge in oil prices Friday. Russia refused to go along with OPEC’s proposal to rescue the coronavirus-battered oil market by further cutting production at a meeting in Vienna on Friday. Oil just had its worst day in 11 years as OPEC and Russia fall out over the coronavirus crisis (Photo by Alexey Vitvitsky/Sputnik/AP) Alexey Vitvitsky/Sputnik/AP The 178th Meeting of the Organization of Petroleum Exporting Countries conference and the 8th Meeting of the OPEC and non-OPEC at the OPEC headquarters meetings will take place on 5 and 6 March in Vienna. Prince Abdulaziz bin Salman Al-Saud, Minister of Energy of Saudi Arabia, arrives for a meeting of the Organization of the Petroleum Exporting Countries, OPEC, at their headquarters in Vienna, Austria. The turmoil comes after the implosion of an alliance between OPEC and Russia, which had been restraining oil supply since the start of 2017 in an attempt to support prices. (PXD) plummeted more than 30%, while Occidental Petroleum Exploration and production companies suffered even steeper losses: Pioneer Natural Resources (CVX) plunged more than 9% apiece, and BP (DAX)was down 7.4% and Italy’s main index fell 7%. Markets in Asia plunged during Monday trading, while US stocks recorded massive declines. The shock to oil also rattled stock markets, which were already in a panic because of the novel coronavirus outbreak. Both oil contracts suffered their worst day since 1991, according to Refinitiv. Brent crude, the global benchmark, plunged 24% to close at $33.36 a barrel. US oil prices crashed as much as 34% to a four-year low of $27.34 a barrel as traders brace for Saudi Arabia to flood the market with crude in a bid to recapture market share.Ĭrude finished with a staggering loss of nearly 26% to settle at $31.13 a barrel. Oil prices suffered an historic collapse Monday after Saudi Arabia shocked the market by launching a price war against onetime ally Russia.
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