Saudi says ready to take extra steps with OPEC+ to stabilise oil market

Saudi Arabia said on Tuesday it is monitoring oil markets and is ready to take extra measures to stabilize them along with OPEC+ allies and other oil producers, state news agency SPA reported citing a cabinet statement, as reported by Reuters.

The comments by the cabinet of the world’s largest oil exporter came a day after U.S. crude oil futures sank into negative territory for the first time in history as demand tumbled due to the coronavirus crisis. [O/R]

“The kingdom is keen on achieving oil market stability and is committed with Russia to implement production cuts over the next couple of years,” the cabinet statement said.

OPEC and allied producers including Russia, a group known as OPEC+, have announced sweeping cuts in production, amounting to almost 10% of global supplies. But with economies around the world virtually at a standstill due to coronavirus lockdowns, demand has dropped as much as 30%.

Benchmark Brent and U.S. oil futures for June delivery plunged to around two-decade lows on Tuesday. Brent for June delivery, known as the front-month contract after the May futures contract expired, fell to as low as $18.10, its lowest since November 2001. At 1257 GMT, it was down 19.4% at $20.62.

U.S. President Donald Trump, who described the drop in the U.S. front-month crude price as a short-term issue caused by a “financial squeeze”, said on Tuesday his administration would consider halting imports of oil from Saudi Arabia, which spearheaded OPEC efforts to curb output.

Trump said the oil industry was hurting from a lack of demand, as states have imposed stay-in-place restrictions to curb the spread of the coronavirus.

Additional reporting by Dahlia Nehme; Editing by Alex Richardson, Rania El Gamal and David Gregorio