Saudis plan big oil output hike, beginning all-out price war

SINGAPORE: Saudi Arabia plans to boost oil output next month to well above 10 million barrels a day, as the kingdom responds aggressively to the collapse of its OPEC+ alliance with Russia.

At the same time, Saudi Arabia has privately told some market participants it could raise production much higher if needed, even going to a record 12 million barrels a day, according to people familiar with the conversations, who asked not to be named to protect commercial relations. With demand ravaged by the coronavirus outbreak, opening the taps would throw the oil market into chaos.

The company’s shares plunged 9% in Riyadh on Sunday, the first time the stock slumped below its initial offering price. Aramco traded at 29.95 riyals as of 1:57 p.m., giving it a market value of 6 trillion riyals . The Saudi government sold 1.5% of the energy giant’s shares at 32 riyals each in December.

The shock-and-awe Saudi strategy could be an attempt to impose maximum pain in the quickest possible way to Russia and other producers, in an effort to bring them back to the negotiating table, and then quickly reverse the production surge and start cutting output if a deal is achieved. With jet-fuel, gasoline and diesel consumption rapidly falling due to the economic impact of the coronavirus outbreak, the energy market now faces a simultaneous supply-and-demand shock.

In one of the most significant pricing moves, Aramco widened the discount for its flagship Arab Light crude to refiners in northwest Europe by a hefty US$8 a barrel, offering it at US$10.25 a barrel less than the Brent benchmark. In contrast, Urals, the Russian flagship crude blend, trades at a discount of about US$2 a barrel less than Brent.

KremlinRussia_E KremlinRussia Russia Putin must surely have seen this coming. like ABC. So, when is the 'RIGHT' time for the Russian Bear to garner the support of XiJinping and China so as to 'side-step' the camel dung and be in 'control' of global oil ? globaltimesnews

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