US, WASHINGTON (ORDO NEWS) — Oil prices of reference grades do not show uniform dynamics during trading on Tuesday, while Brent moved to a weak decline.
The price of May Brent crude futures on the London ICE Futures exchange by 18:03 UTC was $ 22.70 per barrel, which is $ 0.06 (0.26%) lower than the closing price of the previous session. Earlier in the course of trading, the increase in the price of contracts reached 4%.
Futures for WTI oil in May at the New York Mercantile Exchange (NYMEX) by this time rose in price by $ 0.51 (2.54%) – up to $ 20.60 per barrel. Contracts rose more than 7% earlier in the course of trading.
The oil price war launched by Saudi Arabia after the failure of the OPEC + deal put many of its OPEC colleagues at risk, writes The Wall Street Journal. Lacking sufficient financial resources, as well as the ability to increase production in order to compete for market share, Iran, Iraq, Algeria, Libya, Angola and Venezuela are preparing to sharply cut costs.
According to Goldman Sachs analysts, oil demand fell 26 million bps this week, or 25%. They predict that landlocked oil can be traded at negative prices, while Brent is likely to remain at a cost level of $ 20 per barrel. In addition, Goldman Sachs believes that the price war is becoming inappropriate due to a significant decline in demand.
The bank’s experts also noted that the exhaustion of oil storage capacities poses a risk of a quick market reversal to a deficit and could lead to price increases significantly above $ 55 per barrel next year. They also warn that the mining sector will lose at least 5 million bps of capacity. According to analysts, this will lead to higher prices, the scale of which will depend on the size of the created stocks.
Analysts at IHS Markit, in turn, predict that global oil production in the second quarter will fall by 10 million bps due to a lack of space in oil storage facilities and reduced demand amid a pandemic.
At the same time, a decrease in production will be observed in all regions, and OPEC countries, Russia and the United States will be the most affected. According to the IHS forecast, demand during this period will fall by 16.4 million bps compared to the second quarter of last year.
On Monday, March 30, Russian and US presidents Vladimir Putin and Donald Trump discussed the fight against coronavirus and the situation on the oil market in a telephone conversation. The heads of state agreed to hold consultations at the level of energy ministers on the current state of the oil market.
Meanwhile, a spokesman for the Saudi Ministry of Energy said the country plans to increase oil exports by 600,000 barrels per day in May to 10.6 million bpd. As a source familiar with the situation specified to Interfax, in April the country plans to export about 10 million b / s, and in May – about 10.6 million b / s of oil, but so far these are only plans, negotiations with buyers have not been completed.
Contact us: firstname.lastname@example.org
The article is written and prepared by our foreign editors from different countries around the world – material edited and published by Ordo News staff in our US newsroom press.