US President Donald Trump commented on the current oil price crisis, explaining that “low gasoline prices are good for American consumers even if they are hurting the sector,” Trump said, at a White House news conference: “We are trying to find a compromise of some kind.” He said he “spoke to several people” about the same file.
Regarding the impact of falling prices on Russia, Trump said: “It is very devastating for Russia … their entire economy depends on that, and oil prices have become the lowest in decades, so it is very destructive for Russia … I will intervene at the appropriate time.” This comes while it hurts. Low oil prices for US crude producers, who bear, according to Reuters, more costs.
Waving sanctions against Russia
The Wall Street Journal said, “The Trump administration is considering diplomatic efforts” to solve the oil market crisis, and that it might wave “sanctions against Russia to force it to reduce supplies.” This comes while the United States is already imposing sanctions on the natural gas pipeline. The Russian Federation to Germany «Nord Stream 2», and a unit of the Russian oil company «Rosneft» to market crude in Venezuela.
Kremlin spokesman Dmitry Peskov commented, saying that there is no need for anyone to interfere, and stressed that low oil prices are not satisfactory, but Russia does not think the current situation is catastrophic, and added that Moscow has sufficient government reserves to meet the economic impact of weak commodity prices Primary.
US crude prices rose more than 35 percent on Thursday, offsetting some of the selling wave losses that plunged prices to their lowest levels in nearly 20 years, but analysts saw the recovery as a brief respite, expecting further weakness as global demand was affected by the outbreak of the Corona virus, as pressure The outbreak of the virus on the market with the closure of schools and companies, which hinders economic activity, globally.
Both US crude and global benchmark Brent lost half of their value in less than two weeks, but they received some support on Thursday, as investors in various financial markets are working on assessing the impact of the massive stimulus measures announced by central banks.
Saudi Arabia will supply additional oil
Information said, “Saudi Arabia will supply additional oil quantities next month to all customers in Europe who have requested an increase.” Five commercial sources told Reuters, “European refining companies, including: Total, Shell, Eni and SoCar, have all received confirmation of receiving oil supplies.” Additional Saudi crude in April ».
The President of Saudi Aramco, Eng. Amin bin Hassan Al-Nasser, confirmed earlier that “the company received a directive from the Ministry of Energy to work to raise the level of maximum sustainable production capacity MSC from 12 million barrels per day to 13 million”, and that “the company is operating at its full potential quickly Implement this directive. ”
The level of maximum sustainable production capacity is determined by the state in accordance with the hydrocarbon system issued by Royal Decree No. M / 37 dated 2/4/1439 AH. The company announced earlier that it will provide its customers with 12.3 million barrels per day in April, an increase of 300 thousand barrels per day from the maximum sustainable capacity of 12 million barrels per day.
Al-Nasser said that the company agreed with customers inside and outside Saudi Arabia to provide these quantities from the beginning of April, while the White House announced that US President Donald Trump discussed with His Royal Highness Prince Mohammed bin Salman, Crown Prince, Deputy Prime Minister and Minister of Defense, the oil crisis .
Saudi Arabia comments on the “OPEC +” meeting
Energy Minister Prince Abdulaziz bin Salman said earlier that he does not see the need to hold a meeting of the “OPEC +” group in the period from May to June next year, and the minister justified this in the absence of agreement on the measures that must be taken to deal with the impact of the Corona virus on demand And prices. The minister said: “I do not see a justification for holding meetings in May or June, which would only show our failure to do what is necessary in such a crisis and adopt the necessary measures.” The Minister of Energy said, “Every oil producer should maintain its market share.” In a free market , Each oil producer must demonstrate competitiveness, maintain and enhance market share.
Saudi Arabia decided to boost its crude production capacity in conjunction with lower prices,
Member of the Shura Council, Fahd bin Jumaa, said that the Kingdom is on its way to exploit its competitiveness in the current oil markets with a share of 12 million barrels per day, increasing to 13 million barrels per day in the next month, and to a higher level in the future, pointing to the end of the era of negotiation as The age of the likely product is over, and that “there is no free trip anymore.”
Saudi market share in oil markets
He added: “Saudi Arabia’s goal now is to maximize its market share in the global oil markets, and to benefit from the advantage of the least global production, and from the availability of reserves that are sufficient for the next 70 years at current production, and any negotiation that should serve the interest of Saudi Arabia, and achieve its largest possible share, and the biggest loser is Russia. As for shale oil, it is of another type or very light type, unlike most of the kingdom’s heavy oil, and this is what distinguishes them. ”
He continued: «Prices will continue in the range of $ 32, and in the second half, prices will start to improve as the Kingdom controls its strategic share and supports price stability and market balance, in a way that supports the global economy and meets the desires of consumers».
As for the writer and economic analyst, Suleiman Al-Assaf, he pointed out that the decline in oil prices will be very influential, because it is one of the sources of income with the Saudi government, and will have a significant impact on the Kingdom, and increased production will provide the Saudi treasury 7 to 10 billion riyals per month; that is between 100 and 200 billion Riyals annually, pointing out that «the oil market is currently free and competitive, and now we are in the stage of biting fingers».
He stressed that Saudi Arabia alone is capable of increasing oil production of this size, indicating that Saudi Arabia will force Russia to return to the negotiating table because it will not bear these great cuts in oil, and in the second half of 2020 oil prices will rise again.
Expert: The oil industry is governed by the interests of countries
Economic analyst, Dr. Abdullah Baeshen believes that “oil is a commodity influenced by sovereign decisions, interests and relations between countries. If we look at the oil industry during the past two years, we will find an agreement between the OPEC group and the Russian state to prevent the drop in the price of oil, but now everyone is looking for their interests; What led us to a significant reduction helped by the spread of the Corona epidemic; which hindered many services that use oil.
He pointed out that the Kingdom currently has nothing but floating the oil market, in the sense that it is subject to supply and demand, and is distinguished by having the highest inventory in the world, consumer confidence, and that the Kingdom’s increased production is aimed at maintaining the market price
The US Department of Energy has announced the suspension of the sale of crude oil from the strategic oil reserves of up to 12 million barrels. Earlier, the White House announced that US President Donald Trump discussed with His Royal Highness Prince Muhammad bin Salman, Crown Prince and Deputy Prime Minister and Minister Defense, the oil crisis.
The White House: The US President discusses with the Crown Prince the oil crisis
Trump comments on the decline in oil prices .. and pledges to step “at the right time”
Al-Nasser: A directive from the Ministry of Energy to Aramco to raise production to 13 million barrels per day