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CRUDE OIL OUTLOOK 07.05.20

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The Saudi-Russian oil price war may be officially over with the new, historic, OPEC+ deal, but Saudi Arabia has continued to aggressively pursue additional market share in Asia and managed to squeeze share out of its key rivals in the largest Asian oil importers, data showed on Wednesday.

Saudi Arabia doubled its crude oil exports to China in April to the highest volumes since at least 2017, exported the most oil to the U.S. since August 2018, and toppled Iraq as India’s top oil supplier last month

After the collapse of the previous OPEC+ agreement in early March, Saudi Arabia’s oil giant Aramco announced deep discounts for its oil to customers in Asia for two consecutive months, April and May, with the announcement for the May official selling prices coming even after OPEC+ reached a new deal to begin cutting production from May 1.

After the deal was sealed, Saudi Aramco slashed the price of its flagship Arab Light crude grade to Asia by another US$4.20 per barrel compared to April, to a discount of US$7.30 a barrel to the Oman/Dubai benchmark average. In the prior month, the Saudis had slashed all their prices for all regions for April, after OPEC’s top producer and its partner in the OPEC+ pact, Russia, broke up the production cut deal and the Saudis waged a price war for market share by discounting their oil deeply to all markets.

IMPORTANT LEVELS FOR 07/05/2020

RESISTANCE 1 – 1830
RESISTANCE 2 – 1855
RESISTANCE 3 – 1878

SUPPORT 1 – 1745
SUPPORT 2 – 1713
SUPPORT 3 – 1690

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ProCapitas Market-Pro Team

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