Recovery of Oil Production in the US
According to the weekly report of Baker Hughes, the number of active oil production platforms in the United States last week increased by nine to 318 units. This indicates an active recovery of oil production in the United States. The risk of a new collapse in prices below 60 per barrel may again cause sharp discussions among the OPEC+ member countries about reducing production. Therefore, until the beginning of April, the oil market will be as volatile as possible.
Meanwhile, the Saudi Ministry of Energy has instructed the state-owned Saudi Aramco to work on increasing its spare production capacity by another million barrels per day, as it expects that the existing capacity in the world may not be enough to meet the growing demand. The company assured that an additional million barrels will not be released to the market overnight, it will happen gradually. Saudi Arabia is very optimistic about the growth of oil demand. In China, demand is already above pre-crisis levels, and Asia as a whole has almost recovered. Europe and the US are still lagging behind. But vaccination programs, as they are deployed, will improve the situation around the world. The company also did not rule out a lack of supply, as investment in the industry in 2020 was greatly reduced.