Oil rises rapidly before meeting OPEC
US, WASHINGTON (ORDO NEWS) — Oil prices rose sharply on Friday April 3 after the announcement of the meeting of the OPEC + alliance, bringing together the OPEC cartel countries and independent producers, including Russia, Kazakhstan and Azerbaijan.
If OPEC + does not agree, then, according to one of the largest investment banks in the world, Goldman Sachs, prices will drop another 2 times – to $ 10 or less.
The price of the European standard Brent today rose by 10:30 UTC by 1.4% to $ 30.3 per barrel compared to previous trading according to exchange data. April 3, from the start of Friday trading in the early morning, Brent was trading at $ 29.
After 10 minutes, at 10:40 UTC, the European standard of oil was already rising by 7% to almost $ 32. The American WTI grade rises in price within 1% and trades at $ 25.7 per barrel.
The main surplus of oil fell on the European market, and the price of the European grade is rising in the expectation that after the OPEC + meeting the alliance members will agree and Saudi Arabia will not flood Europe with new supplies, as promised earlier.
The price of oil rose sharply after 6:00 p.m. UTC at the auction the day before, on April 2, immediately from $ 25 to $ 36 per barrel of Brent. The jump in prices was triggered by a statement by US President Donald Trump about the upcoming agreement between Russia and Saudi Arabia to reduce production by 10-15 million barrels per day. Now the excess of oil in the world is estimated at 15-20 million barrels.
“Such volumes look critical for the two countries (cumulative production of about 23 million barrels per day), and such a large-scale reduction is impossible without involving all oil-producing countries,” Rosbank analysts said.
The Organization of Petroleum Exporting Countries (OPEC), on the proposal of Saudi Arabia, has begun preparations for negotiations between the countries participating in the OPEC + deal.
The OPEC + meeting will be held on Monday, April 6, in a video conference format with the participation of the ministers of the alliance countries, the Ministry of Energy of Azerbaijan reported.
“Azerbaijan was invited to a meeting of OPEC ministers and non-OPEC ministers to hold a video conference on April 6 to stabilize the oil market. OPEC and non-OPEC ministers will participate in the meeting, and a new” Declaration of Cooperation “will be discussed. It should be noted that this meeting is held at the invitation of the Kingdom of Saudi Arabia after negotiations mediated by US President Donald Trump, “the Ministry of Energy of Azerbaijan said.
Saudi Arabia made an official statement the evening before about the need for an urgent meeting of OPEC + participants to discuss the situation on the oil market. The Saudis made a proposal to meet OPEC + after statements by US President Donald Trump about a conversation with the Crown Prince of Saudi Arabia.
The first to discuss the situation were the presidents of Russia and the United States. April 1, President of the Russian Federation Vladimir Putin and US President Donald Trump held a telephone conversation in which they expressed concern about the situation in the oil market.
On March 6, the OPEC + alliance suspended operations after Saudi Arabia decided to increase oil production due to Russia’s unwillingness to support a 1.5 million barrels per day reduction in production.
In March, Russia produced 11.29 million barrels per day. Saudi Arabia is the main partner of Russia under the OPEC + agreement of the countries participating in the reduction of production for stable prices that expired on April 1.
Even before April 1, Saudi Arabia bombarded European oil buyers with supply offers at significant discounts. Since April 1, the kingdom has increased its supply in the market to the maximum possible 12.3 million barrels, of which 300 thousand are offered from stockpiles in oil storage facilities.
Due to coronavirus and quarantine in countries on the world market there was an excess of oil of 15-20 million barrels of oil, and prices fell by more than 2 times compared to those that were before the pandemic and massive quarantine restrictions.
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.
On this day, the price of Brent European standard oil on the Intercontinental Exchange in London (ICE) fell 8% and fell below $ 23 per barrel (May contracts), the price of the American WTI standard 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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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.
