Oil prices are falling again Wednesday after Saudi Arabia doubled-down on its threat to flood the world with millions more barrels of crude despite the … All rights reserved. This is bad news for Russia and other oil-producing nations, who will now see their income reduced, but the Saudi aggression is an outcome they may have predicted, and accounted for.
The Infected President’s Ill-Advised Trip to Bedminster, Trump or Biden, the U.S. and Europe Will Split, What No One Should Forget About the 2020 Vice-Presidential Debate. U.S. oil consumption faces similar obstacles, with government support under the Coronavirus Aid, Relief, and Economic Security Act coming to an end on September 30.
There are fears — or hopes, if you’re a rival oil producer — that output from U.S. shale deposits is set for another big drop in the coming weeks and months. Get your first six issues free–––––––––––––––––––––––––––––––. Why Russia and Saudi Arabia Are In a Battle Royal Over Oil Prices Russian President Vladimir Putin meets with Saudi Arabia's Crown Prince Mohammed bin Salman in Riyadh, Saudi Arabia… We’ve all seen where a standoff between the two big beasts of the OPEC+ group can lead. Kamala Harris vs. Mike Pence: who won the vice presidential debate? Aramco cut its OSPs to Asia in May by $3 to $5 across all its grades, marking a second month of drastic cuts. To contact the author of this story:Julian Lee at jlee1627@bloomberg.net, To contact the editor responsible for this story:Nicole Torres at ntorres51@bloomberg.net. And they may have further yet to fall. What synergies do they have with Solar Panels and Wind Turbines ? All of these countries are regular buyers of Russian oil. Have a confidential tip for our reporters? MOSCOW (Reuters) - Behind a Saudi-Russian truce to stabilise oil markets with a record output cut, market players are seeing the two production heavyweights still trading blows in the physical market. There was a similar disagreement back in March, with Russia wanting to preserve the status quo and Saudi Arabia seeking deeper output cuts, that sparked a brief production free-for-all that helped push oil prices below $20 a barrel.
Rather than restricting supplies, handing the Russians the chance to expand their market share, the kindom has opened the taps. “As demand is falling the competition gets even tougher. Polish refineries will import a record 560,000 tonnes of Arab Light crude via Gdansk in April, the data shows. We’ve already seen where such a standoff can lead.
“Russia has built up a $170bn national wealth fund from excess oil revenues in recent years and believes it can tap that to offset any short-term price war,” says The Financial Times. He wants to make oil traders “as jumpy as possible.”, The OPEC+ output accord allows the group to add nearly 2 million barrels a day to supply from January, Source: Bloomberg calculations using data from OPEC, Note: The Tatrget + compensation figure for June 2020 includes the voluntary additional cuts offered by Saudi Arabia, Kuwait and the UAE. We’ve already seen where such a standoff can lead. US election 2020 polls: who is in the lead - Donald Trump or Joe Biden?
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And there is at least as much uncertainty on this front as there is with demand. Russia, however, did not agree to the proposed production cuts, sending the price of oil downward. Oil producers face some tough choices as demand recovery falters. Oil prices suffered an historic collapse overnight after Saudi Arabia shocked the market by launching a price war against onetime ally Russia. Oil Giants Turn On Each Other As Crude Prices Plummet, MIT Scientists: Nuclear Fusion Energy Could Be Closer Than Thought, Trump’s Offshore Oil Ban Will Hit Wind Farms Hard, Oil Prices Soar As Trump’s Condition Improves, Blue Ammonia: Another Major Breakthrough For Hydrogen Power.
Before it's here, it's on the Bloomberg Terminal. Green Hydrogen Projects Are Surging, But Are They Feasible? Russia's state oil … All quotes delayed a minimum of 15 minutes.
The state oil company is predicting supply could quickly rise to 260,000 barrels per day from about a third of that level. That has created downward pressure on energy prices, which is why in 2016 members of OPEC (but really Saudi Arabia) and Russia agreed to limit production in the service of higher prices. Saudi Arabia and Russia don’t agree on how to approach faltering oil demand. “The moves over the weekend may well have been part of a negotiating chess game, and the Saudis and Russians can still reach a compromise.
Shell Shuts All 9 Of Its Gulf Of Mexico Oil Platforms Ahead Of Hurricane. But Vitol has a starkly more bullish view than its rivals. Is there a lack of demand for oil or just over-supply? “Beyond the cooperative statements the fight is still going on,” a source at a trading firm told Reuters, adding that Saudi Arabia’s official selling prices (OSPs) signalled that the kingdom was targeting the Asian market, where demand remains relatively resilient during a global slowdown. Does Amazon Even Care About Whole Foods Anymore? Russia's state oil giant Rosneft, High supplies of May-loading Saudi crude oil to Asian markets, along with lower OSPs, have tipped differentials of Russian grades like Sokol.
Merchant of Record: A Media Solutions trading as Oilprice.com.
Russia and Saudi Arabia may be ready to enact deeper oil production cuts to stabilize prices, the energy ministers of the two countries said in a joint statement.
His Russian counterpart Alexander Novak is more cautious, wanting to avoid repeatedly revising a deal that sets out production targets to the end of April 2022. Meanwhile, the price reductions on Aramco cargoes to Europe were smaller, with a few increases on its heavier grades. Saudi Arabia is also gaining ground in Europe, Russia’s backyard for oil and gas exports. While overall compliance with the promised output cuts has been unusually good — thanks in part to the no-nonsense attitude of Saudi Arabian energy minister Prince Abdulaziz Bin Salman — a few countries are still struggling to implement their cuts in full. This wider strategy is, in fact, similar to Russia’s, in that it hopes to increase market share and damage competitors: Riyadh is not only upping production, but also cutting prices by 10%, announcing unprecedented discounts of almost 20% in key markets. That agreement sees the group adding another 2 million barrels a day to their collective production from the beginning of January (see the chart above), and Novak prefers to wait as long as possible before making a decision to alter that. Russia's state oil giant Rosneft ROSN.MM declined to comment. “The two countries are discussing it and I am joining at the appropriate time if need be,” Trump told reporters as quoted by Reuters. Chevron Is Making Workers Reapply For Jobs, Oil Rig Evacuations Continue Ahead Of Hurricane Delta, BP Forced To Boost Security In Azerbaijan As Conflict Escalates, The U.S. Fell Short In Providing Effective Oil And Gas Relief, Big Oil Still Isn’t On Course To Hit Global Climate Goals, The U.S. Moves To Ease Dependence On Foreign Rare Earths, Nigeria Looks To Ramp Up Its Oil Refining Capacity, Premier Oil Set To Merge With North Sea Rival, Britain Blocks The Approval Of A Major Coal Mine, Poland Fines Gazprom $7.6 Billion Over Nord Stream 2, China To Add 1.4 Million Bpd In Unneeded Refining Capacity, Oil Prices Sink On Larger than Expected Crude Build, Oil Prices And The Pandemic Will Force Gulf Banks To Merge, Pipeline Operators Lure Texas Shale Producers With Discounts, UK Looks To Power Every Home With Offshore Wind Energy By 2030, The Renewable Major That (Briefly) Became More Valuable Than Exxon, U.S. Upstream Oil Mergers Still Slow Despite Chevron, Devon Deals, U.S. Takes Stake In Battery Metals Miner To Counter Chinese Control, Turkey Looks To Expand Oil, Gas Drilling In Black Sea, Oil Exploration In Norway Slumps By A Third, Tesla To Consider Investing In Major Nickel Producer, Iraq Boosts Oil Exports Despite OPEC+ Pledges, Oil Industry Begins Ad Campaign In Swing States, Hurricane Laura Shut In Largest Oil Production Volume Since 2008, Vietnam Approves Exxon’s $5-Billion LNG-To-Power Project, Russian Oil Production Tops OPEC+ Quota In September, Total Bets Its Future On Renewables And LNG, Yet Another Shale Producer Files For Bankruptcy, Nord Stream 2 Nears Completion After Clearing Another Hurdle, Texas Taxpayers Face $117 Billion Bill For Orphaned Oil Wells, U.S. Firm Looks To Gain Ground In India’s Energy Storage Market, Venezuela Restarts Gasoline Production At Two Refineries, U.S. If the price war continues, it is difficult to see how the North American shale oil industry can survive. Even discussions between the United States, Russia and Saudi Arabia might not stabilize the oil market and prices until the coronavirus outbreak is controlled. We should all remember what happened last time they couldn’t agree on what to do. “But if the collapse is lasting,” the paper continues, “oil executives say there is nothing to stop oil prices from tumbling to the lowest levels in at least five years.”. That email address is already in the database. Saudi sales to Europe are poised to surpass 29 million barrels in April, slightly less than the record of August 2016, shipping data available in Refinitiv Eikon showed. Receive our cutting-edge 3-part investor education series for FREE. We will not share your email address.You can unsubscribe at any time. The room available for additional supply from the OPEC+ countries also depends on how much oil is coming from elsewhere.
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