Oil prices bounced back Tuesday morning and have sustained the gain throughout the trading day despite Saudi Arabia’s plan to pump additional millions of barrels into the market, determined to sustain the price war.
From a low of $35.24 a barrel on Monday, the biggest plunge since 1986 and the 1991 Gulf War, Brent crude price closed at $36.25 per barrel on Tuesday, a 6 percent increase according to live updates by oilprice.com, an online platform that provides information regarding global oil markets. West Texas Intermediate gained 5 percent.
However, Saudi Arabia plans to increase its crude oil production from below 10 million barrels per day currently to 12.3 million bpd next month, the company said in a filing with the Saudi stock exchange.
According to the filing, Aramco “will provide its customers with 12.3 million barrels per day of crude oil in April; that is, an increase of 300 thousand barrels per day over the Company’s maximum sustained capacity (MSC) of 12 MMBD.”
“Oil markets face a moment of truth as the disagreement between key OPEC+ members means unhinged supplies will likely overwhelm near-term market balances amid large-scale demand destruction due to virus containment measures,” Barclays Bank said in a note on Tuesday. The United Kingdom bank is the latest among major banks to slash its oil price outlook.
The UK bank cut its forecast for Brent crude to $43 a barrel from $59 and for West Texas Intermediate to $40 from $54 previously, Reuters reported.
STEPHEN ONYEKWELU
