THE “WRECKED” OIL MARKET:

OIL MARKET suffering from GLOBAL PANDEMIC:

As global pandemic affects people everywhere the planet, it's also adversely affecting the economy of the world. Everything is jammed as the world is stopped by the disease because it affects the daily lives of individuals it also badly affected the oil-exporting worlds.

Russia, Saudi Arabia are the highest producers of oil and for 3 years that they had a deal under which both countries will limit their boring so as to boost the costs for the costs will surely rise when the boring is restricted and more in demand.

But thanks to recent pandemic the demand for Oil across the planet is dried up. China because the biggest importer of Oil also refused to shop for any oil for it had been affected the foremost by COVID-19. The demand for oil is evaporated because the worldwide stock markets are falling and therefore the use of oil in jets also as airplanes are restricted as all the flights are canceled to prevent the spread of deadly disease.

PRICES FELL TO NEGATIVE FOR the primary TIME:

For the primary time the worth of West Texas, the benchmark for US oil fell as low as -$37.63 a barrel. The contract suggests that traders are willing to pay to possess oil taken off their hands or perhaps taken for free of charge or with none cost.

The US Energy Information Administration reported last week a record 19.3 million barrel crude stock build while there's currently 21 million barrel remaining storage available at the clashing hub in Cushing. The oil prices fell into negative territory for the primary time in history.

SAUDI-RUSSIA CONFLICT:

It all goes back to the Saudi-Moscow conflict when Saudi Arabia analyzing the worldwide situation wanted to chop the assembly of oil to stay the costs stable. The Russians showing inflexibility, disagreed by saying that they wanted to supply more.

This led to the worth war between both states. It became worse when Moscow messaged Saudi Arabia that Saudi goes to face tons more trouble by this loss than Russia as Saudi’s economy is primarily hooked into oil Export. Hence both states kept the verbal attacking resulting in price competition. Both Saudi and Russia flooded the market with oil supply with falling prices thanks to less or almost no demands.

US STEPS within the PRICE WAR:

The refining industry has been continuously battling the conflict between its producers. US President Donald Trump took some action after US oil Producers were in danger of going bankrupt because the oil prices fell to negative. Donald Trump appealed to the Prince of Saudi Arabia Muhammad Bin Salman and Russian President Putin to line aside from their conflicts and specialize in build-up also as stabilizing their oil markets.

RECORD-BREAKING CUT call at OIL PRODUCTION:

The price war between Russia and OPEC finally resolved after an A joint agreement was made by OPEC led by Saudi and Russia on April 12 and Oil output was cut by 9.7 million barrels per day. The agreement was made after an extended negotiation and discussion between the states.

But the analyst says that even that quantity of Oil cut isn't enough to stabilize the markets browsing huge loss. “Market prices are showing that Oil is about worthless now”; says Jim Krane (Aljazeera)

The analysts predicted further oil cut in the future because the storage problems remain on the highest. the matter isn't about the way to use the oil but to where to store it because the storage ashore and sea is now full. US President Trump says that the nation will preserve the oil for future use and buy oil for national reserve but also concerns about the US storage and capacity to save lots of the oil.

If the outbreak of COVID gets severe or on the peak, the consumption of oil by many countries like China, Iran, South Korea, Italy may be lessened and stopped causing the oil industries and producers to face an enormous loss by the month of May.

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