Since March 2020 it’s became tough task to control crude oil prices (all benchmarks). It’s all happened because Russia walked away from OPEC+ agreement. Countries rich in hydrocarbons have been trying to increase market share by increasing production. But covid19 impact was unpredictable and resulted in drastic reduction of worldwide demand for hydrocarbons.
After WTI futures contract prices fell below $-40 per barrel (unprecedented situation!) OPEC+ members agreed extra production cuts. No demand – supply balance achieved. Low prices for Brent crude oil means low income and budget deficit. Today Saudi Arabia announced an additional 1 million bd from June 1. Following Saudi Arabia announcement, the UAE & Kuwait announced production cuts.
In last one week global demand increased as global lockdown conditions eased. But covid19 pandemic and panic about it will continue to influence hydrocarbons prices at least till end of the year.
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