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Crude oil price: Saudi Arabia increases oil production to record levels | International Business News


DUBAI: Saudi Arabian state oil giant Saudi Aramco said Tuesday that it will increase its crude oil production to 12.3 million barrels per day in April, a record amount.

The move appeared to deliver on the country’s promise over the weekend to increase output after Russia refused to cooperate to cut output. That led to a 25% drop in the price of crude oil on Monday, the biggest decline seen since the 1991 Gulf War. Benchmark international Brent crude rose more than 8% on Tuesday more than $ 37 a barrel.

In a presentation on Tuesday at Riyadh’s Tadawul stock market, Aramco, formally known as the Saudi Arabian Oil Co., said the increase in production represented an increase of 300,000 barrels per day. Analysts said it would likely also involve the release of stored barrels.

“The company agreed with its customers to provide them with these volumes as of April 1, 2020,” he said in the presentation. “The company expects this to have a positive long-term financial effect.”

Shares of Saudi Aramco, whose trade was briefly halted before announcing the production decision, closed 9.88% in trading at 31.15 riyals, or $ 8.30, giving the world’s most valuable company a valuation of $ 1.66 trillion. . That is still below its initial public offering price of 32 riyals in December.

It occurred one day after Aramco shares collapsed by 10% and withdrew from trading to reach the maximum allowable loss of Tadawul in one day, lowering its valuation to $ 1.4 billion. Aramco had offered only a portion of its shares in the Tadawul to investors.

Aramco’s decision will likely flood global energy markets and put further pressure on prices. The company had reached $ 2 trillion in the first trading days in December.

The lower oil prices come because there is less demand for air travel amid the spread of the new coronavirus worldwide, further depressing prices. However, that will likely bring gasoline prices down at the pump for Americans. On average, one gallon of unleaded lead in the US UU. It sold for $ 2.36 per gallon, according to AAA, below $ 2.43 a month ago.

Times of India