After the Middle Eastern countries the US stock traders brought down the oil prices too
Despite the agreement to reduce oil production that was signed by 23 oil-producing countries, the accumulated reserves due to the disruption of the previous OPEC+ transaction and the fall in global oil demand are forcing market participants to significantly reduce its prices.
The concluded agreement did not affect the drop in global demand and did not stabilize prices.
Earlier, Saudi Arabia announced a price reduction, which provided an additional discount of $ 5.5 for Arab Super Light crude oil, increased the Arab Light discount from $ 8.6 to $ 10.3 and dropped another $ 3.35 and $ 2.95 respectively for brands Arab Medium and Arab Heavy. Following it, other Middle Eastern countries also reduced their prices. Qatar offers Qatar Wild oil with a discount of up to 13 dollars per barrel, Al-Shaheen with a discount of 10.4 dollars, Qatar Marine with a discount of up to 9.3 dollars per barrel.
The US $ 3.8 billion US Oil Fund, which accounts for about 25% of all outstanding contracts for West Texas Intermediate oil futures, said it is changing its market position and transferring 20% of its contracts for the month of the second exchange (in this case, from May to July), since an unprecedented global overabundance of oil in the market significantly reduces contract prices near the dates of their delivery, writes Bloomberg. The price of American oil in May fell by 12%, the difference in prices for June and July reached $ 4.7, writes finanz.ru .
The market has a unique situation when oil production continues, despite the low demand for it and the lack of free storage tanks. Oil traders use tankers for overexposure of oil, the prices of which have increased in some cases seven times, writes finanz.ru with reference to the words of the chairman of the board of directors of the St. Petersburg oil terminal Mikhail Skigin. Near the largest fuel terminals in Europe, about 30 tankers are anchored, which cannot be unloaded due to the fact that the tanks on the shore are completely full.
The OPEC+ deal took place last Sunday: countries agreed on a record reduction in oil production by an average of 23% - 15 million barrels per day. OPEC+ countries will reduce production by 10 million, after stabilizing demand in July, production will increase, and by the end of the year, production will be reduced to 8 million, by May 2022 - to 6 million barrels per day. Russia, which broke the previous deal, capitulated in a new agreement, agreeing to cut production by half more than Riyadh and eight times more than it was offered before the spread of the coronavirus pandemic in the world and a global drop in oil demand.