Oil is at its lowest level after a price war led by Saudi Arabia

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I wrote names for Munawar on Monday 9 March 2020 07:00 PM – Oil prices on Monday fell more than 30 percent, after they lowered Its official price for selling crude and drew up plans for a significant increase in oil production next month, in what analysts saw as the start of a price war between the two major producers at a time when the spread of Corona virus is eroding global demand growth.

And markets are awaiting a significant increase in oil production next month not to come up with an agreement at the “OPEC +” meeting, Friday.

Prices fell by about a third after Saudi Arabia’s move after Russia refused to implement another major production cut proposed by OPEC to stabilize crude markets, which were affected by fears of the economic impact of the Corona virus.

By 0552 GMT, Brent crude futures fell $ 12.23, or 27 percent, to $ 33.04 a barrel, after dropping earlier to $ 31.02 a barrel, the lowest level since February 12, 2016. And Brent crude futures are on track to record the largest decline Daily since January 17, 1991.

The US West Texas Intermediate crude fell 11.88 dollars, or 29 percent, to 29.40 dollars per barrel, after touching the level of 27.34 dollars, which is also the lowest level since February 12, 2016.

US crude is likely heading to an all-time low, surpassing a 33 percent drop in January 1991.

And the financial markets in the Gulf countries recorded great losses with the opening of trading on Monday, against the backdrop of the collapse of oil prices, which fell by about 20 percent in the midst of a “price war” initiated by Saudi Arabia.

Analysts believe that the decline in oil prices expresses the concern that the markets are witnessing from the effects of the spread of the new Corona virus on the global economy, and the demand for crude while the markets are witnessing a state of dumping of this vital substance.

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The disintegration of the group known as OPEC +, which includes OPEC as well as independent producers including Russia, ends cooperation that has lasted for more than three years to support the market, and to achieve price stability recently in light of the threat from the economic impact of the outbreak of the Corona virus.

Two sources told Reuters on Sunday that Saudi Arabia plans to increase production to more than ten million barrels per day in April after the end of the current agreement to curb production at the end of March.

And the world’s largest oil exporter is seeking to punish Russia, the world’s second largest crude producer, for not supporting the proposed production cuts last week by the Organization of the Petroleum Exporting Countries (OPEC).

And Saudi Arabia reduced its sales prices of crude to global markets, to reach its lowest level in more than twenty years, at least, which means offering unprecedented cuts to markets in Europe, the Far East and the United States, to attract buyers to buy Saudi oil, at the expense of other suppliers.

Over the past month, Saudi Arabia has committed to reducing the production ceiling agreed upon in the framework of “OPEC Plus”, or 2.1 million barrels per day.

And Saudi Arabia pushed during the “OPEC Plus” meeting in Vienna on Friday towards an additional reduction in production by 1.5 million barrels per day to face the decline in demand for crude due to the economic repercussions of the outbreak of the Corona virus. But the discussions were unsuccessful.

Russia has rejected the “OPEC” proposal to make large cuts in production in order to stabilize prices damaged by the economic consequences of the Coronavirus.

These were the details of the news of oil at its lowest levels after a price war led by Saudi Arabia to this day. We hope that we have succeeded by giving you the complete details and information.

It is also worth noting that the original news has been published and available on Voice of Lebanon The editorial team has in Gulf 365 Make sure of it and it may have been modified, and it may have been completely transferred or quoted from it. You can read and follow the developments of this news from its main source.







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