Brent crude prices continued its fall below the psychological threshold of $30 per barrel on Wednesday due to global recession concerns and declining oil demand worldwide as a result of the coronavirus pandemic.
The international benchmark fell to $28.40 per barrel on Wednesday at 0804 GMT for a 0.17% daily loss, keeping Brent below the key level of $30 a barrel over the last two days.
American benchmark West Texas Intermediate (WTI) hit as low as $26.63 at the same time for a 1.18% daily decline, while continuing to mark its lowest levels since February 2016.
As governments throughout the world announce unprecedented measures this week to reduce the economic impact of coronavirus outbreak, the price war for greater market share between the world’s biggest oil producers, Saudi Arabia and Russia continue to pull crude prices ever lower.
A spokesperson for the Kingdom's Ministry of Energy said on Tuesday that Saudi Arabia aims to further increase oil production in the next two months, reaching a peak of more than 10 million barrels a day as the kingdom explores a new field.
"Saudi Arabia will utilize the gas produced from the Fadhili gas plant to compensate for around 250,000 barrels a day of domestic oil consumption, which will enable the Kingdom to increase its crude exports during the coming few months to exceed 10 million barrels a day," the spokesperson said.
Russian Energy Minister Alexander Novak announced previously in March that his country might boost production by 250,000-300,000 bpd in the short term and 500,000 bpd over the longer term.
As the two oil producers are set to ramp up their oil production levels as of April 1, markets expect an even larger drop in oil prices in the upcoming weeks.
By Ebru Sengul Cevrioglu