Friday , August 19 2022

Saudi Arabia to cut oil prices


Saudi Arabia tried to prevent oil prices from dropping a month ago. The kingdom of Wahhabi said on Sunday that it would cut its oil exports to 500,000 barrels a day next month. Prospects for supply decline had an immediate impact. The Brent barrel rose more than 2% on Monday morning before passing a little over 1% in the early evening. The rebound remains undefined, and the price of black gold has fallen almost 20% since reaching its peak in early October.

Saudi Arabia to cut oil prices

VIDEO. Oil price forecasting: Is the mission impossible?

Restore Balance

Saudi Arabia's announcement brought together OPEC nations and partners like Russia at a meeting in Abu Dhabi. This meeting failed to reach an official agreement. It will be the focus of the cartel summit in Vienna on December 5th. However,Just production It is under study. On Monday, Riyadh expects to reduce its output by one million barrels a day to restore market equilibrium.

Donald Trump especially urged OPEC and Riyadh to cut fuel prices the day before the US election. Surprisingly, however, the White House allowed some countries to continue importing Iranian crude oil as sanctions were imposed in early November. Thus, supply tensions were weaker than expected, and prices continued to decline, especially as global demand weakened and shale – driven US production reached record levels.

Record production in the United States

Faced with this new situation, Riyadh and its allies will change equipment again. "Arabia is hoping to compensate Iran for sanctions, and now the US elections are over, and there is no reason to increase output"Says Denis Florin, founding partner of Lavoisier Conseil. Is there a risk of discomfort in the trump? "
Arabia maintains an alliance with the United States but must act despite price drops " Harry Tchilinguirian, an analyst at BNP Paribas, said.

Russia started to stand in line.

Russia, a key ally of OPEC, said it would partner with any new negotiations. " When decisions are made based on market conditions, Russia will, of course, work with other countries to ensure a balanced and stable market. Russian Energy Minister Alexander Novak "Beyond geopolitical differences, Arabia and Russia are working together to stabilize prices", Harry Tchilinguirian.

Etienne Gotz

Vincent Kollen

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