• 4 minutes "Natural Gas Trading Picks Up Considerably Amid High Volatility" by Charles Kennedy - ...And is U.S. NatGas Futures dramatically overbought at the $6.35 range?
  • 8 minutes How Far Have We Really Gotten With Alternative Energy
  • 12 minutes  What Russia has reached over three months diplomatic and military pressure on West ?
  • 10 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 3 days Revisiting: "The U.S. Grid Isn’t Ready For A Major Shift To Renewables" from March 2021 by Irina Slav at OILPRICE
  • 16 hours What China is Learning from Russia's War in Ukraine and its Consequences
  • 6 days How cheap Chinese tires might explain Russia's 'stalled' 40-mile-long military convoy in Ukraine
  • 1 day Failure To Implement Russian Oil Ban Could Send Oil Crashing To $65
  • 4 days Natural Gas is the Cleanest and most Likely Source of Energy to Fuel the World.
Is Energy Security More Important Than Climate Change?

Is Energy Security More Important Than Climate Change?

Russia’s war has highlighted vulnerabilities…

Oil Price Collapse Continues As Saudis Push For Record-Breaking Production

Crude collapsed by more than 30 percent under the combined pressure of a no-deal end to the OPEC+ meeting last week and Saudi Arabia’s announcement on Sunday that it would turn the taps on and pump as much oil as it can.

At the time of writing, Brent crude was trading at $31.34 a barrel and West Texas Intermediate was changing hands at $27.44 a barrel and the bottom is anyone’s guess as the Covid-19 outbreak continues to spread globally, fueling panic and growing fears about oil demand.

This weekend, Saudi Arabia first said it would cut its official selling prices for April by between $6 and $8 per barrel, signaling it was now changing its priorities and focusing on preserving its market share.

At the same time, Bloomberg’s Javier Blas and Anthony DiPaola reported that the Kingdom was planning to raise production, going to a record-high of 12 million bpd if it had to, according to unnamed sources in the know. The purpose could be to make Russia and other producers feel the pain that Saudi Arabia is feeling in the price department and convince them to agree to cuts, according to Blas and DiPaola.

However, if this is indeed the Kingdom’s purpose, it may be miscalculated as Russia is less reliant on oil revenues and it also has no ambitious multi-billion-dollar investment programs. And, according to analysts, it wants to hurt U.S. shale.

"Russia has been dropping hints that the real target is the US shale oil producers, because it is fed up with cutting output and just leaving them with space," analysts from energy consultancy FGE said in a note cited by CNN. "Such an attack may be doomed to failure unless prices remain low for a long time."

Now that Saudi Arabia has decided to do a U-turn, its impact on shale producers would be pretty quick to manifest: a lot of the industry is already feeling pain from lower prices before the crash, coupled with a growing unease among banks to lend to shale drillers who have billions in pending debt repayments.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News