The Winner Among the Crude Oil Price Clash is Saudi Arabia, Analysts Say
As per various energy analysts, the country that comes out as a winner amid the prevailing crude oil price cash is Saudi Arabia. The statements came after the West Texas Intermediate index that is a U.S. based crude oil index saw negative pricing for the futures of May.
“Saudi Arabia and Russia have both won here, but it’s a very pyrrhic victory,” Said Dave Ernsberger, Global Head of S&P Global Platts for commodity pricing. “they need to look over their shoulder because Brent is not far behind, other crude benchmarks are not far behind, and the world is running out of storage.”
“So, what we saw in Oklahoma yesterday, not unlike the virus in Wuhan, we can see the oil market virus spread to the rest of the world very quickly here,” Ernsberger said.
“Our estimates are the total inventory in the world could be exceeded by the end of May (or the) beginning of June,” he predicted, before warning Saudi Arabia and Russia should keep their celebrations “short and brief.”
“Ultimately, Saudi is a winner,” Christian Malek, J.P. Morgan gas research, “They have managed to get out the door early selling oil while there was demand and then retracted that in their latest cut — which we view as a weak deal,” he added.
“I think the situation is as follows, the Saudis recognize that they have one last big cycle coming, they want to make sure they position for that but equally they have a very important relationship with the U.S. — and particularly Trump,” Malek said.
“On balance, I would argue that their relationship is a critical path to this negotiation around oil but ultimately it is not the holy grail. I think Saudi will look to negotiate and if it doesn’t work and Trump’s not re-elected, they do win on the oil side,” he added.