Saudi Aramco says it will increase oil production capacity

Saudi Aramco says it will increase oil production capacity

Saudi Aramco says it will increase oil production capacity

Employees operate a drilling rig at the Daqing Oilfield in Heilongjiang province.

West Texas producers Diamondback Energy Inc. and Parsley Energy Inc. pledged Monday morning to curb activity in response to the oil-price decline.

Shares in Aramco have tumbled with oil prices.

This sent oil prices crashing, registering the single biggest one-day loss in three decades on Monday.

Oil prices have nearly halved since January after the collapse of a pact on cutting supplies at last week's meeting of the Organization of the Petroleum Exporting Countries, Russia and other producers, a group known as OPEC+.

The Saudi state oil giant's move is reported to put production levels above capacity, suggesting it could be releasing from its inventories.

As such, oil prices could slide below $20 a barrel in the short term. It is expected that other members of that group will also increase production.

Meanwhile, global demand for oil is slowing down due to the outbreak of a new virus that's hampered travel and business.

The present run of lower oil prices will bring significant benefits for the Indian economy as reduced import bill and lower current account deficit and inflation could have a positive impact on GDP growth, Kotak Institutional Equities Securities said in its latest report on the oil sector.

Chris Weafer, director at Macro-Advisory consultancy, said it was still possible Moscow could decide to return to cooperating with OPEC by autumn if prices remained very low.

This March 9, 2020 file photo shows a man wearing a protective face mask against the background of Nahr Bin Umar oil field, where flames emerge from flare stacks.

Worldwide bonds issued by the government and its oil giant Aramco plunged in early trade on Monday, and the Saudi riyal fell sharply against the USA dollar in the forwards market.

"We are not in a price war with anyone". The significant depreciation of the rouble in recent days should give an indication of its economic prowess. The cuts were an attempt to stop the oversupply in the market that had pushed prices down. "News on the coronavirus does not seem to be inspiring demand hopes right now".

Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University.

OPEC on Wednesday lowered its forecast for global average daily demand by 0.92 million barrels, to 99.73 million barrels.

In Saudi Arabia, Crown Prince Mohammed bin Salman gave the green light for the kingdom, the world's top oil exporter, to pump at will after Russian Federation rejected an OPEC proposal for deeper cuts to cope with the coronavirus outbreak, two sources familiar with the matter said.

Both benchmarks dropped to their lowest since February 2016 in the previous session and recorded their biggest one-day percentage declines since January 17, 1991, when oil prices fell at the outset of the U.S. Gulf War.

The global shift to cleaner energy sources is now making a stronger case for shifting away from the role as the oil market's central bank and toward pumping more oil, even at a lower price, to prevent its reserves becoming a stranded asset.

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