The collapse in the Oil price accelerated After the US President, Donald Trump has imposed a 30-days free visa ban for Europeans, reducing the risk of a global recession is increasing rapidly, a break down the prices for US WTI and North sea Brent crude oil to around seven percent. Thus, the quotations are in the vicinity of the Four-year lows.
So the already dramatic situation is exacerbated in the Oil market. Yesterday, Tuesday, the OPEC had slashed its forecast for growth of global oil Demand for this year of 920,000 to 990.000 barrels per day to only 60,000 in together. The industry Association, the International Energy Agency (IEA) warned on Monday that the demand will shrink in the current year, to around 90,000 barrels per day. That would be the first decline since the 2008/09er-debt crisis in the United States.
“The Situation we are currently experiencing appears to be unprecedented in the history of the oil Market,” said Fatih Birol, Executive Director of the IEA. “A combination of a massive supply overhang and a significant demand shock at the same time,” says the expert. While there is a huge Oversupply on the world market, the demand for the commodity due to the Corona pandemic.
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Saudi Arabia wants the maximum production capacity increase
The Oil scandal between Russia and Saudi Arabia have exacerbated the Situation: Russia had refused to support cuts in the Opec countries to go along with. The cuts have stabilized the price. However, Russia feared that especially the US-Fracking-would have benefited companies. Since the US is not part of the Opec, have this can simply promote unabated. Russia President Putin seemed to believe that his country could better come up with a price lower than other States. Especially Saudi Arabia is dependent because of its high government spending on high price.
But Putin’s statement does not seem to be working: as a result of the message, the Russian stock market and the ruble plummeted. Because Saudi Arabia has announced, in turn, the funding to massively expand. Riad told the state-controlled group, Saudi Aramco, to increase the maximum discharge capacity of 12 to 13 million barrels per day – that would be the first expansion for at least a decade. Last updated since December of 2019-listed group had pumped 9.7 million barrels per day.
“The company will make the greatest efforts to this instruction as quickly as possible,” said CEO Amin Nasser. According to the experts, this can take years, depending on whether existing projects are expanded, or new fields must be tapped and will cost tens of billion of dollars. The former Saudi Minister of energy Khalid Al-Falih had said 2018, an increase of a million barrels per day would have cost more than 20 billion dollars. db Oil price WTI 31,87 USD +0,54 (+1,72%) OTC
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United Arab Emirates faltering promotion firmly on to the
, the United Arab Emirates, a close ally of Saudi Arabia, with make: The state Oil company Abu Dhabi National Oil Company (Adnoc), announced to increase its actual promotion starting in April, from three to four million barrels per day. The step is part of a longer plan for growth, the capacity to five million barrels per day will be increased. The Plan will now be implemented faster, it said in a message of the company. “There is plenty of production capacity, in view of the circumstances, quickly to the market,” said energy Minister Suhail Al Mazrouei. The United Arab Emirates is the third-largest conveyor in OPEC, behind Saudi Arabia and Iraq (4.6 million barrels per day for February 2020.)
Russia’s readiness for dialogue
signals After the price slump, investors are anxiously waiting for Russia’s reaction. The budget of the raw material power is large to the large Share of Dollar revenues for the sale of oil-dependent. Is calculated on the basis of 42.4 US dollars per Barrel of Oil. With the current Oil price, the budget would not be covered. The country needs to go to his reserves in order to meet social obligations. All of the plans and national projects should be met. The insured, the government on Monday hastily scheduled meeting, as in Russia was a holiday.
The Ministry of Finance in Moscow, tried to the population, which felt reminiscent of earlier crises, to appease: the reserves were sufficient for six to ten years, even if the price of Oil spent only 25 to 30 US dollars. The government stressed that Russia is ready for a price war with Saudi Arabia and with its production costs, international competition is capable of. The country, however, signaled a willingness to negotiate.
“are The doors closed,” said energy Minister Alexander Novak in Interview to the Russian state television Rossiya 24. Russia was willing to provide its cooperation with the oil cartel Opec and Opec+ United-producing countries continue. Nowak was assumed that it could take months, until the Oil price recover. Russia was able to reduce rapid flow rates or to increase.
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