Islamabad Telegraph Report
As Crude Oil price starts to recover gradually, Saudi Aramco has purchases 70 percent of SABIC for $69.1 billion. Adequate detail of purchase was not immediate available to media. However, the move [ of purchasing major shares] of SABIC by
Saudi Aramco, officially the Saudi Arabian Oil Company, is a Saudi Arabian multinational petroleum and natural gas company based in Dhahran, Saudi Arabia, has encouraged global oil Industry which has been reeling from the shock of pandemic of Covid-19.
By acquiring major shares of SABIC, Saudi Oil giant Aramco , one of the largest companies in the world by revenue, and according to accounts seen by Bloomberg News, the most profitable company in the world, has provide much needed relief nd confident to global Oil industry which is struggling to recover from catastrophe of the pandemic of Covid-19.
Writing for Oilprice.com , Irina Slav, a noted journalist reported that Barclays raised its oil price forecast for crude oil by $4 a barrel but noted that the price improvements will be slow.
“Reuters. reports the bank now expects Brent crude to average $41 a barrel this year, with West Texas Intermediate seen at $37 a barrel. Yet in the third quarter, Barclays expects Brent crude to trade at an average of $37 a barrel and WTI at $34 a barrel,” Irina reported.
Right now, both benchmarks are trading below $40 a barrel, with Brent at $37.68 a barrel at the time of writing and WTI at $35.43 a barrel. They are both set for their first weekly decline after a tentative but extended rally. The rally, however, was not strong enough to sustain initial optimism following reports from OPEC+ balance would soon return to oil markets.
Meanwhile, another bank has warned the price rally would fizzle out soon. Earlier this month, Morgan Stanley said the price rise from recent week “appears mostly supply- rather than demand-driven, and it is questionable how strong refinery runs can increase against this backdrop.”
Despite the continuous market-fixing efforts in supply by the OPEC+ group, the world’s consumption of oil is unlikely to return to the levels before the coronavirus pandemic until late next year, according to the bank.
Other concerns about an oil price correction include U.S. shale restarting too much production as prices rise, as well as a sharp rise in oil production when OPEC and allies start unwinding the cuts, Morgan Stanley says.
Goldman Sachs is also guarded in its forecasts. In fact, the investment bank is rather bearish on oil right now. Citing uncertainty around oil demand recovery, Goldman said last week it expected Brent crude to soon slip down to $35 a barrel as expectations about a quick rebound in demand for oil turned out to have been overoptimistic.
Aramco purchases 70 percent of SABIC for $69.1 billion : A much needed boost for global oil industry
