US, WASHINGTON (ORDO NEWS) — Saudi Arabia recorded a record increase in export prices: the cost of the Arab Light reference mix for consumers in Asia was immediately increased by $ 6.10 per barrel – a maximum of at least two decades. On average, state-owned Saudi Aramco raised July supply prices for all of its grades in the range of $ 5.60-7.3 per barrel, well above the expected increase of about $ 4.
There was a plan, and the plan worked. The postponement of the OPEC + meeting from June 18 to the beginning of the month, observers believed, was associated with the publication of export prices from Saudi Arabia and other Gulf countries. Saudis usually publish prices on the 4th-5th, but can sometimes shift dates. This time, apparently, they used this factor as an instrument of pressure at the meeting of oil-producing countries.
The OPEC + video conference was held on Saturday, and the parties agreed to extend production cuts at the previous levels for another month, and on Sunday Saudi Arabia announced a sharp increase in prices, thereby doubling the set of factors for the continuation of the oil rally.
Who would have thought a month ago that in the oil market, where a record excess of supply was formed in April, there will already be signs of a shortage.
According to Bloomberg, the demand for “black gold” from China is steadily recovering.
Saudi Arabia continues to play a key role in the hydrocarbon market and have a major impact on prices. In March, when it was not possible to agree on a further reduction in production under OPEC +, the kingdom unleashed a price war, reducing selling prices by a maximum of 30 years.
As a result, the price of oil has fallen to many-year lows, however, an additional, if not the main, reason was, of course, the collapse in demand amid the spread of coronavirus.
Nevertheless, even then, some experts suggested that the collapse in prices was a planned action, and perhaps even with Russia.
Against the background of the closure of most economies, it did not make much sense to reduce production in March, since there was still no demand and prices would continue to fall, so it would be logical to arrange a short-term collapse, inflicting a powerful blow to the US shale sector.
Then, in May, a rally reigned in the oil market, and the Saudis at the same time announced a price increase for the Asian market.
In May, oil futures soared by almost 100%, and in June continued their rise. Quotes of the North Sea Brent mixture reached $ 43 per barrel, and such a price is no longer critical for many large producers.
The US energy sector is also extremely interested in rising prices, and this has been repeatedly stated by Donald Trump. Otherwise, a wave of bankruptcies will sweep across the US oil sector.
However, if oil shale companies again begin to increase production, the price rise may stall.
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