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Saudi Arabia knocks down oil and gas prices
06-04-2020 13:08
Saudi Arabia knocks down oil and gas prices
Saudi Arabia knocks down oil and gas prices

Saudi Arabia is exerting influence on large oil exporters, aiming to outpace its rivals.  The Kingdom’s economy has been unaffected by the coronavirus pandemic yet. So, nothing disrupts its standoff with Russia. OPEC’s de facto leader Saudi Arabia has unleashed the oil trade war with the powerful rival to win the lion’s share in the global oil market. The Kingdom unveiled the plans to ramp up its oil output starting from May, setting the nearest target of 10.6 million barrels per day. This expansion comes as a result of the fact that gas has replaced crude oil as a commodity for producing electrical energy amid waning domestic demand for oil, Saudi’s oil ministry commented on this decision. Besides, Saudi Arabia intends to reduce oil shipments as a precautionary measure to contain the coronavirus spread, the top official added. There is no hope for the conflict resolution in the near future. Recently, Saudi Arabia has reportedly contacted Russia urging it to discuss the extension of the OPEC+ pact. However, the rumors have not been confirmed. At the same time, there is evidence that the Kingdom now gives priority to natural gas. Riyadh has offered huge discounts on liquefied gas. Such a move is a serious blow to Russian gas suppliers as Saudi Arabia is keen to entice the buyers of Russian gas with lower gas invoices. Saudi Arabia kicked off an oil price war with Russia on March 8, 2020. Earlier, Moscow had abruptly left the OPEC summit in Vienna, rejecting the idea of extending the pact on oil production cuts.         

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

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