the oil market is experiencing a double crisis of the time, joillaista not before perceived. Production will continue at its peak, although the price fell and the raw material still not in demand.

the Major producers Saudi Arabia, Russia and the united states have taken measure of each other for years, but the director took a few weeks corona virus. One major producer has not yet begun to restrict pumping.

crude oil prices on world markets has dropped this year to about $ 65 (less than eur 63) per barrel for 25 dollars. The oil market follows analysts consider it possible that the crude-oil price per barrel this year could weigh up to 10 to the dollar. (you move to another service)

Samuli Huttunen / Yle

This assessment is uttered, the Norwegian energy research and consulting company Rystad Energy (switch to another service).

Ten dollar barrel price has already been approached in Canada. (you move to another service)

Suurpudotus began in early march, when Saudi Arabia and Russia left the door to blazing OPEC+-countries meeting in Vienna. The saudis require russia to reduce production prices to increase, but Russia is not in this excited ever. A three-year cooperation agreement between Opec and the producing countries outside the middle of unraveling a few days away from the march-April turn.

as Soon as unlucky after the meeting, Saudi Arabia announced itself to increase its daily production of its 9.7 million barrels, more than 12 million barrels.

Saudi Arabia announced a week ago that it will hold in the coming months, the production speed of the stick (you move to another service). Oil life, the kingdom has decided to swallow a price decrease of losses and said he’d cut the state budget by five percent. Euros this represents a 12 billion cut in government consumption.

in Saudi Arabia, therefore, concludes that it is worth to sell the oil bear prices in order to maintain and even to increase its market share.

Stocks to meet

the Oil demand of the amount of the drop is impossible now to estimate, said to Yle, Nordea bank sustainable development senior advisor Thina Margrethe Saltvedt from Oslo.

He lists several reasons: the Oil consumers of China the need is not able to estimate when the corona virus has stopped the country’s economy. Also do not know how much air traffic will be reduced and for how long, or what rate the Us economy is slowing.

the Fourth reason is the difficulty to know how much the world actually has free capacity to store oil. Market perception is that warehouses are almost full.

the Full inventory of it, that empty oil tanks, the demand has grown and the day the rents doubled. Risk investors are preparing for the fact that when the price per barrel drops enough, oil can get a tanker waiting for the price to rise.

When stocks meet, including oil tankers, demand has grown.Mohamed Hossam / EPA

the Financial Times (you move to another service) according to the half-year tanker rental days the price has already doubled to 85 000 dollars per day. Three-month contracts, the day the price can be staggering 150 000 dollars a day. So some people are waiting for a drastic fall and believe just as hard to the increase in oil prices.

nordea’s advisors Saltvedt I can only say that traditionally, China has filled the oil stocks prices during the period and this is expected to happen now. Amount no idea. Saudi Arabia is in any case offered additional discounts, especially to asian customers.

Even stop production on the potential

When the so-called normal conditions, oil demand decreases, producers will reduce their investments and suspend new oil field exploration.

a number of analysts of Nordea-the bank for sustainable development senior advisor Thina Margrethe Saltvedt mentions the production of suspensions as an option.

Interrupt can be considered sillloin, if the price of oil stops at $ 20 a barrel, he estimates.

the Production outage is, however, slow and expensive solution, as well as its getting started again. During the blackout, the oil supply pressure may fall and production will not return to the earlier amounts, to find out Saltvedt.

Sure Saltvedt said only one thing: Saudi Arabia and Russia are not able to take into account that the oil market should be their own ylituotantonsa in addition, another distraction – and it would be even higher and totally uncontrollable corona virus.

Read more:

Where Saudi Arabia and Russia oil dispute is about? The dispute is in the background of both power patterns, king of Saudi Arabia, the exchange approach

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