By Tsvetana Paraskova – Mar 19, 2020, 11: 00 AM CDT
Saudi Arabia continues to indicate to the marketplace that it is not pulling back from the oil rate war regardless of the crumbling oil rates in the middle of coronavirus-hit need and guarantees of substantial additional supply next month.
Oil huge Saudi Aramco will proceed with the reduction of its refinery rates in Saudi Arabia in April and May in order to maximize more petroleum for exports, an official at the business informed Reuters on Thursday.
Saudi Arabia will continue to supply a record 12.3 million barrels per day(bpd) to the oil market in the coming months, as per order from the energy ministry, the main Saudi Press Firm reported on Wednesday.
The Kingdom is intent on unleashing growing petroleum volumes on the marketplace, aiming to substantially boost its crude oil exports to a record-breaking more than 10 million bpd in May.
The Saudis, who introduced an all-out cost war for market share with Russia after Moscow refused to back much deeper cuts, will not just boost April exports from the existing 7 million bpd, however will likewise grow exports in May by another 250,00 0 bpd from April.
After the collapse of the OPEC production cut deal, OPEC’s de facto leader and the world’s top oil exporter, Saudi Arabia, assured to flood the marketplace with crude oil as of April 1, sending oil prices into a tailspin and taxing the market which is being damaged by an extraordinary demand shock amidst the coronavirus pandemic.
Oil rates naturally responded to this double whammy of supply and demand shock and crashed to 18- year lows on Wednesday.
Experts say that $20 oil may not be the bottom as the marketplaces continue to worry with a growing variety of countries entering into lockdown and restricting domestic and international travel.
Some experts state oil rates in the teenagers are not far off, while Paul Sankey, handling director at Mizuho Securities, stated “Oil prices can go negative” in a note this week, as carried by Fox Business
By Tsvetana Paraskova for Oilprice.com
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