Published: Mon, March 23, 2020
Markets | By Otis Pena

Oil Suffers Biggest Weekly Loss Since 1991 With Demand in Focus

Oil Suffers Biggest Weekly Loss Since 1991 With Demand in Focus

For the week, the United States crude benchmark was down 29 percent.

Saudi Arabia's Crown Prince Mohammad bin SalmanThe United States believes Saudi Arabia's flooding of oil markets compounds the coronavirus-caused global economic crash and intends to send a senior official to Riyadh for months to boost efforts to stabilize energy markets, senior USA officials said on Friday. The sources also say that Russian Federation did not expect the Saudis to trigger a price war but they are confident that they can hold out longer than Riyadh if needed. Two of the three commissioners at Texas's oil agency are skeptical of a plan now being weighed to curtail crude production in the state in an effort to balance global supply with demand and stabilize prices. US oil now trades at less than $23 a barrel.

West Texas Intermediate for April delivery, which expires Friday, rose 56 cents to $25.78 a barrel on the New York Mercantile Exchange as of 7:54 Singapore, trimming a fourth weekly loss.

US Treasury Secretary Say Quarantine Will Probably Last 10 to 12 Weeks
The massive stimulus bill could cost up to $1.5 trillion and is reportedly aimed at battling the economic impact. Bernie Sanders, I-Vt., has proposed universal $2,000 checks per month "for the duration of the crisis".

I would say that it may be a matter of time before both sides will have to return back to the negotiating table but so far, they are hardening their resolve as we are still in the early stages of the fight and nobody appears to be worn out just yet.

The total active USA rig count, meanwhile, also declined by 20 to 772, according to Baker-Hughes. The kingdom has vowed to increase production to a record 12.3 million barrels per day, and has chartered numerous tankers to ship oil around the world, pushing prices to near 20-year lows this week. Sitton proposed a plan in which Texas, the world's third-largest oil producer, to join the two oil superpowers to curb supply, asking for federal support to negotiate with the other countries.

Trump administration officials will continue to reduce global oil output with sanctions on what the officials called bad actors in Iran and Venezuela, both of which are OPEC members, and their shipping networks, the officials said.

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