Gulf stock markets have sustained losses throughout the week after OPEC failed to reach agreement with non-OPEC producers led by Russian Federation on additional production cuts to support prices. Moreover, it is greater than Saudi Arabia's maximum sustained production capacity, so the kingdom will take barrels from storage to flood the market rapidly in a fight for market share.
Saudi Arabia and its ally the UAE said on Wednesday they will together boost production by at least 3.5 million barrels per day (bpd), to 16.3 million bpd, from April escalating a price war with Russian Federation, which refused a deal to cut output during Friday's OPEC meeting.
The collapse of Opec's talks with major producers outside the cartel, known as Opec+, marks an end to an nearly four-year alliance established in the wake of the 2016 oil price crash to shore up market prices by limiting new supply into the market.
They said they will together boost production by at least 3.5 million barrels per day (bpd), to 16.3 million bpd, from April.
UAE's national oil company, ADNOC, followed Saudi Arabia in announcing plans to raise crude sales to more than 4 million barrels per day (bpd) and accelerates a push to boost capacity by a quarter to 5 million bpd.
"Operators in the UAE have ample production capacity that will be quickly brought online given the current circumstances", the minister wrote on Twitter.
The budget of the world's second-largest oil producer, almost half of which comes from the energy sector, is more resilient to low oil prices than most major oil producers, but Monday's collapse has pushed oil prices below Russia's breakeven price of $42 a barrel.
Australia wins fifth women's T20 World Cup title
However, as far as the final is concerned, it was a one-sided game with Australia dominating the proceedings completely. Australian skipper Meg Lanning said the expectations were huge, especially after the first loss.
At the meeting on Friday between the 14-member cartel and non-member oil producers, often referred to as OPEC+, OPEC recommended an additional 1.5 million bpd of oil cuts until the end of 2020, in addition to rolling over existing cuts of 2.1 million bpd.
European refiners including Royal Dutch Shell Plc, BP Plc, Total SA, OMV AG, Repsol SA and Cepsa SA have all received crude allocations from state-owned Saudi Aramco significantly above their normal levels, according to people familiar with their operations.
Oil prices resumed their decline Wednesday, sliding back toward the four-year lows they hit Monday.
However, he also kept the door open for further negotiations, saying new production agreements between OPEC and Non-OPEC nations could still be reached.
Saudi Arabia's influence on oil markets is much akin to a central bank's role in financial markets.
The oil market was taking the decision very negatively due to the impact on jet fuel demand and expectations for business activity and economic growth, said Bjoernar Tonhaugen, head of oil markets at energy consultant Rystad.
Russia's leadership is also well aware of the growing influence of non-OPEC-plus members on oil prices as well as of forthcoming structural changes in market fundamentals that can not be controlled by Russian Federation alone or by OPEC-plus. The base case is for oil to remain between US$30 and $40 a barrel, as the Saudis dial back to 2018 production levels and USA shale-oil producers cut output.