The price of crude oil saw a massive slump on Monday as Saudi Arabia unexpectedly declared a price war on Russia. However, the price began to recover the following day as the US suppliers decided to further cut their global output and supply.
Brent Crude suffered a massive 30% decline in prices on Monday when Saudi Arabia started a price war. Later, Brent Crude futures climbed by 3.9%. As a result, the price of oil per barrel rose by $1.44 and stood still at $ 38.66. On the other hand, the West Texas Intermediate rose by 3.33% and the price got stable at $35. 48. WTI saw a gain of $1.12 in the price for each barrel.
With the continuous fall in global oil prices, various major oil producers from the US have decided to reduce oil drilling. Occidental Petroleum is the newest addition to that list. Trade analysts say that this recovery in crude oil prices is temporary as Saudi Arabia and Russia can get hostile with each other again.
The USA Struggles to Maintain its Position as Biggest Oil Producer in the World
For the past two years, the United States held on to the title of the largest oil producer in the world. However, today it seems to be on the verge of losing it. This position was largely supported by the concession that Saudi Arabia was providing to the US.
The recent OPEC+ meet failed to bring a solution to tackle the falling demand and prices of oil amid the outbreak of Covid 19. Saudi Arabia is now threatening to flood the market with excess oil production. This can bring down the oil prices to less than $30 for every barrel. This can impact the daily oil production from the US.