Lahore, 21st April: Mubasher Lucman in his recent video discloses that a great game is on and the true turn will come in place from May onwards.
It is first time in the world history that due to the growing pandemic the oil production has increased and demand has reduced so there is a negative trend in oil pricing.
According to the renowned anchor, an estimated 50 million layoff has taken place in the retail sector and oil refinery. The power sector has taken a hit and condition is further deteriorating. West Tax Intermediate (WTI) America price controller estimated oil trading rates at -37.63 $ per barrel on Monday.
The trading level for June orders was 20$ per barrel for Europe and rest of the world the oil standard fixing company Brent Crude lowered its price by 8.9% and the trading price was less than 26$ per barrel.
Oil Prices Plunging Down in the Global Market
Lucman informed in his video, that oil trading is based on future contracts looking at the demand and consumption companies hedge to cover their risks. In current scenario oil producing companies are under pressure and in need to enhance their storage as oil consumption has gone down drastically and existing stock has not depleted.
The oil producing companies are interested to supply the oil to countries against earlier contracts to avoid additional storage cost where as countries want to delay, as their stocks are under utilized.
OPEC had lowered the prices by 10% in order to counter the depleting international demand, but it seems that this price cut would not be enough as the oil refineries have soaring stocks and outward trend is negligible.
Oil producing countries like Nigeria and Iraq that do not have refinery facilities will face more pressure as compared to the big players like Saudi Arabia and Russia. The fact is more layoffs will take place and oil production has to be stopped to control and gauge the future market requirements.
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Lucman adds that a new power game will start once companies decide to take positions and change in balance of power might tilt towards China who is fully capable of storing and even erecting new storage facilities.
It is survival of the fittest. Many small companies will vanish from the canvas and in bigger companies, fight for supremacy will depend on how they study and spend in this bearish market.
Mubasher Lucman, in the end stated it is to be seen how this economic drama unfolds in the ever changing world, once things open after the lockdown.
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