OIL prices have risen after Saudi Arabia agreed to cut production again to help offset the dramatic fall in demand caused by the coronavirus.
Brent crude traded at $30.32 per barrel yesterday afternoon, up $0.69/bbl on the day , as traders welcomed Saudi Arabia’s decision to reduce daily production by a further one million barrels from June.
The move encouraged the UAE and Kuwait to cut output by a further 100,000 and 80,000 barrels daily respectively.
It boosted hopes the oil market may finally be on the road to some sort of recovery after months of turmoil.
North Sea at 'breaking point' after oil price turns negative in US
Brent crude fell to an 18-year low of less than $20/bbl last month when oil prices turned negative in the US briefly amid fears that storage capacity would run out.
The latest reductions came on top of the record production cuts agreed by members of the Opec + grouping including Saudi Arabia and Russia in April. The cuts, which totalled 9.7m barrels daily, took effect this month.
Sector watchers yesterday noted signs that demand has started to recover following moves by countries around the world to ease lockdowns they imposed to slow the spread of the coronavirus.
“Oil demand is now coming back from the abyss in March and April 2020 as we get gradual reopening,” said Bjarne Schieldrop, chief commodities analyst at Scandinavian bank SEB.
Do big North Sea oil firms deserve to get special treatment from taxpayers amid crisis?
Signs of recovery will be welcomed in the North Sea, where firms are facing huge financial and logistical challenges.Trade body Oil & Gas UK said last month the North Sea industry had been left at breaking point following dramatic falls in oil and gas prices. Brent crude sold for around $70/bbl in January.
Mr Schieldrop warned demand could fall again if there are renewed virus outbreaks.
West Texas Intermediate crude sold for $25.94 yesterday afternoon, up 7.5%, or $1.80/bbl.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereLast Updated:
Report this comment Cancel