With a situation where ‘demand is down and supply is up’, oil industry prices continue to suffer in what can only be described as ‘Mad March’.
While the coronavirus pandemic continues to tighten its grip on society leading to a cut in fuel consumption as the global economy slows down, disputes between Saudi Arabia and their rivals has seen the top oil-producing country raise output to full capacity.
Saudi Arabia slashed export prices and said it would pump at a record of 12.3 million barrels per day, flooding the market with oil that it didn’t need. By contrast, producers in the USA’s top producing state, Texas, have asked for regulatory intervention to reduce production.
International crude oil prices LCOc1 CLc1 have dropped about 45% this month and don’t even cover the cost of much of the world’s production, causing energy companies worldwide to drastically rein in their spending. March 9th witnessed the biggest single-day drop of 24%.
The collapse in demand and a diplomatic impasse between Saudi Arabia, Russia and others have triggered unprecedented responses from governments and investors.
As Reuters reports, it is an industry in distress.
With business energy prices fluctuating wildly, knowing when to strike a deal with suppliers has become an art in itself.
Smart energy procurement is one of the main ways in which companies can save money and our expert knowledge and ability to keep track of the markets in these most volatile of times, makes us very well placed to take care of that side of your business.
If you would like to have a conversation with one of our team of consultants, please give us a call on 01225-867722 or visit our dedicated energy procurement page.