After Saudi Arabia raised the prices of global oil refiners, oil prices rose.
London crude oil futures rose 7.1%, more than $ 31 per barrel, and US crude oil futures rose 10%. The state-owned Saudi Aramco launched a price war earlier this year by offering substantial discounts on crude oil prices. The company has raised all crude oil prices in June. At the same time, Saudi Arabia and its OPEC partners are undertaking substantial production cuts to rebalance the oversupply market.
Hans van Cleef, senior energy economist at ABN Amro, said: "The higher prices proposed by Aramco suggest a rebound in demand and suggest that OPEC + has actually begun to reduce production to balance the market."
The OPEC + alliance, including Russia, began to implement production cuts of nearly 10 million barrels per day. Prior to this, due to the impact of the epidemic, oil inventories recorded a record increase. Both the US and China are showing initial signs of a recovery in consumption, and Saudi Aramco's pricing is the clearest signal that demand is beginning to grow again.
As of 11:53 am London time, Brent ’s July crude oil futures settlement price rose by $ 1.77 to $ 31.49 per barrel, an increase of 6%.
West Texas Intermediate crude oil rose 8.6% to $ 26.05 per barrel.
Forecasts of the impact of global oil consumption vary, and some people estimate that daily consumption will be reduced by more than 30 million barrels, accounting for 30% of demand. Nevertheless, in recent days there have been reports from Poland to Germany and Florida that fuel demand, especially gasoline demand, has begun to pick up.
Some major initiatives in Saudi Arabia ’s pricing are aimed at European and Mediterranean refineries, which are Russia ’s main markets for crude oil. Last month, Saudi Arabia and Russia agreed to cooperate again as members of the OPEC + alliance, which seems to be an endorsement of the Russian government. According to the price list, prices in these regions rose by US $ 5.80 to US $ 7.50 in June.
Giovanni Staunovo, a commodity analyst at UBS Group AG, said: "The rise in oil prices shows that as part of the OPEC agreement, Saudi Arabia will not only reduce production, but also reduce crude oil exports by raising oil prices."