US, WASHINGTON (ORDO NEWS) — Oil prices are rising rapidly on April 2, pending a deal to reduce production. The cost of oil is growing and because of the plans of China to buy fuel in reserves.
By 10:00 UTC, the cost of European standard Brent crude on the London Stock Exchange is growing by 11% to $ 27.78 per barrel (the contracts closest to execution), the American WTI grade has risen by 10% to $ 22.39 per barrel.
By 7 a.m., growth was 13% to $ 27.88 per barrel immediately after reports of China’s plans to start buying oil in government reserves, while prices remain low.
A few hours earlier, US President Donald Trump announced that he expects that Saudi Arabia and Russia will reach an agreement on oil production in the next few days.
“I think they will work on it over the next few days … They know what they need to do,” Trump said at a press conference in the White House.
On April 1, the OPEC + deal to reduce oil production by OPEC countries and its partners, led by Russia, officially stopped. On this day, the price of oil rose by 11% due to Russia’s plans not to increase production.
Russia will not increase oil production after April 1 amid a sharp decline in demand, as this is meaningless, they said TASS and Bloomberg, citing Russian officials. Earlier, the Ministry of Energy allowed an increase in production in Russia to the level preceding the start of the OPEC + transaction.
Since April 1, Saudi Arabia increased oil production by 2 million to 12 million barrels per day, The Wall Street Journal reported with reference to kingdom officials. This is the limit of production capacity. The kingdom has increased supply to 12.3 million barrels in the market due to its own reserves.
On Monday, March 30, the price of oil at world exchanges updated the fall records observed since March 6, 2020, when the OPEC + largest oil-producing countries balancing production split up.
The price of Brent European benchmark oil on the Intercontinental Exchange in London (ICE) fell 8% and fell below $ 23 per barrel (May contracts), the price of the American WTI benchmark fell 6% to less than $ 20 per barrel. Such prices were in November 2002 – during the previous collapse in the oil market.
Russian Urals oil has become cheaper than fuel oil in Europe. On March 30, a barrel of high sulfur fuel oil in North-Western Europe was $ 1.19 more expensive than a Urals barrel, and the cost of delivering oil from Siberia, the country’s oil cluster, in all areas of sea exports exceeded the cost of oil itself.
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