Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Crude Oil Prices Slip as Aramco CEO Upholds Expansion Plan

Published 08/10/2020, 09:14 AM
Updated 08/10/2020, 09:16 AM
© Reuters.

© Reuters.

By Geoffrey Smith 

Investing.com -- Crude oil prices slipped a little in early trading in New York on Monday, after the chief executive of Saudi Aramco (SE:2222) indicated that his company is still investing in building production capacity even at current price levels.

Amin Nasser was quoted by news agencies as saying that Aramco, the world’s largest oil company, still intends to raise its production capacity to 13 million barrels a day, comments that could be interpreted as effectively staking out a claim to a higher share of the global market in the longer term.

The comments undid some of the positive impact that Nasser had had on prices at the weekend, when he said that he expected global demand to keep rising through the end of the year. He didn't give a timeframe for the action, but given Saudi Aramco's ability to produce at much lower costs than most of its rivals, Nasser's signal is a sobering reminder in the risks of investing in new capacity elsewhere.

By 9:15 AM ET (1315 GMT), U.S. Crude futures were up 1.1% at $41.70 a barrel, while Brent Oil Futures were up 0.8% at $44.74 a barrel.

Gasoline RBOB Futures were up 1.9% at $1.2301 a gallon.

Both markers were well within their recent ranges, as the market struggled for direction against a backdrop of uncertainty over the latest U.S. stimulus bill, and signs that the global economic recovery is flattening out after a smart bounce from the lows of the second quarter, with U.S. fuel demand still some 10% below pre-pandemic levels, according to the Energy Information Administration.

Direction should come later this week with the big three reports on the world market, with the U.S.’s Short Term Energy Outlook due Tuesday, and the OPEC and International Energy Agency monthly reports due on Wednesday and Thursday, respectively.

On Friday, Baker Hughes had reported that the number of active oil drilling rigs had fallen to its lowest since 2005, a development that Saxo Bank analyst Ole Hansen said cast further doubt on any significant short-term rebound in U.S. production.

The Petroleum Equipment and Services Association meanwhile said in a report published Monday that job losses in the U.S. shale patch rose 43% in July and now total over 93,000 since the eruption of the Covid-19 pandemic.

 

 

 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.