SimpleFX Blog
    Facebook Twitter Instagram
    Wednesday, June 29
    Facebook Twitter LinkedIn Telegram YouTube
    SimpleFX BlogSimpleFX Blog
    Banner
    • Home
    • News
    • Tutorials
    • Updates
    • Opinion
    • Trading Academy
    • Trading Schedule
    SimpleFX Blog
    Home»Analysis»Saudi Arabia Gaining Oil Market Share and Ability to Move Prices
    Analysis

    Saudi Arabia Gaining Oil Market Share and Ability to Move Prices

    Natalia AlvarezBy Natalia AlvarezJune 15, 2020No Comments3 Mins Read
    Facebook Twitter Pinterest LinkedIn Tumblr Email

    As the COVID-19 pandemic caused mass disruption to global oil production and demand, Saudi Arabia has positioned itself to take over a more significant market share. While other countries are predicted to struggle to recover from closed oil fields, Saudi Arabia looks set to expand, with their share in the oil market once again reaching heights that were last seen in the 1980s. 

    [button link=”https://app.simplefx.com/login” size=”medium” target=”new” text_color=”#eeeeee” color=”#df4444″]SELL Oil[/button]        [button link=”https://app.simplefx.com/login” size=”medium” target=”new” text_color=”#eeeeee” color=”#3cc195″]BUY Oil[/button]

    On April 20, 2020, oil prices fell to below $0 for the first time. West Texas’ May futures contracts sold for -$37.63 a barrel. A severely lowered demand for oil caused this unprecedented drop during the national shutdowns caused by the coronavirus, but a continued full-scale oil production. This imbalance led to oil reserves becoming full and producers desperately needing to free up space that was currently occupied with the excess oil. Although this significant drop in prices was specifically for futures, the situation led to a decline in crude oil prices around the globe, although not as drastically.

    USOIL recovery has been slowed over the last days

    In an attempt to mitigate further oversupply issues, OPEC (Organization of the Petroleum Exporting Countries) agreed to cut their production rates in April for an extended period, until the market was operating at full capacity again. Oil production would be reduced by 9.7 million barrels a day, which would be revised at later dates as demand slowly increased. When the agreement was first made in April, it was expected that the cuts could be lifted by June. Still, a recent revision has asked countries to continue cutting their supply by a collective reduction of 9.6 million barrels a day. 

    Saudi Arabia has recently announced that they refuse to continue with these ongoing supply cuts, beginning in July. This gives them a favorable market position in the short-term with a more abundant supply to offer, but it means that when demand does pick up again, they are poised to provide it immediately. Saudia Arabia offers low production costs and can grow its oil sector significantly. At the same time, other countries may need to close oil rigs down as they financially struggle permanently. 

    [button link=”https://app.simplefx.com/login” size=”medium” target=”new” text_color=”#eeeeee” color=”#df4444″]SELL Oil[/button]        [button link=”https://app.simplefx.com/login” size=”medium” target=”new” text_color=”#eeeeee” color=”#3cc195″]BUY Oil[/button]

    U.S. oil fell slowly on Thursday as the major stock exchanges also experienced drops, amid fears of a second wave of COVID-19 cases and further economic struggles. West Texas Intermediate fell by 8.2% to $36.64 a barrel, and Brent Crude fell by 7.7% to $38.51 a barrel. On Friday, oil prices were not drastically different, with West Texas Intermediate losing a further 8 cents, but Brent Crude gained 18 cents. The number of oil rigs currently functioning in the United States continues to fall, as an additional seven closed over the week (there are now only 199 left operating). This comes as gasoline from Saudi Arabia has entered the American market, as the country refuses to halt production, flooding the country with cheap oil. At the same time, many of their rigs remain shut.

    featured
    Share. Facebook Twitter Pinterest LinkedIn Tumblr Email
    Previous ArticleLearn to Use Moving Averages for Successful Trades
    Next Article Get 30% Revenue Share with New SimpleFX Affiliate Banners
    Natalia Alvarez

    Related Posts

    How the Recession and Euro Fragmentation Risk Impact EURUSD

    June 29, 2022

    A Possible Rebound Scenario for Japanese Stocks?

    June 28, 2022

    How Long the Recent LTCUSD Run Can Last?

    June 24, 2022

    Leave A Reply Cancel Reply

    Copyright © 2022. SimpleFX
    • SimpleFX WebTrader
    • Unilink Affiliate Tracker

    Type above and press Enter to search. Press Esc to cancel.

    We and our partners use cookies for analytics purposes and to serve personalized ads. You can view our privacy policy here and our cookies policy here
    Accept.
    Privacy & Cookies Policy

    Privacy Overview

    This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
    Necessary
    Always Enabled
    Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
    Non-necessary
    Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
    SAVE & ACCEPT