According to Amin Nasser, CEO of Saudi Aramco, Saudi Arabia is likely to support the increase in oil production planned for April, saying that the leading oil producer is ready to live with low oil prices for a while.
In this regard, IHS Markit said that the upcoming flow of supplies from Saudi Arabia and other oil producers could lead to the largest supply of crude oil in history.
Meanwhile, the meeting between OPEC and non-OPEC countries, which was scheduled in Vienna on Wednesday, was canceled due to Saudi Arabia's lack of agreement with Russia.
Numerous American oil companies have quickly cut their costs of spending, so analysts expect a consolidation or restructuring.
In recent years, US oil production has grown to almost 13 million barrels per day, making it the world's largest producer.
"Some of them (shale oil companies in the US) may not be able to withstand long-term low oil prices, where, in the said case, production in the US will decrease. The reduced availability of oil will likely reduce the discount of WTI compared to Brent," Societe Generale analysts said.
On Friday, Donald Trump said that the US will take advantage of the low oil prices and make up for the country's emergency supply of crude oil. The move is aimed at helping energy producers fight the falling prices.
On Monday, the Department of Energy said that in two weeks, the US can begin purchasing domestic crude oil from the Strategic Petroleum Reserve and fill it in a few months. However, Energy Aspects said that these purchases will not compensate the drop in demand or increase in supply of oil.
According to data, it is assumed that in April, the increase of oil production from the Permian basin will compensate for the decline in every second shale formation, helping the total production to lift by about 18,000 barrels per day, and amount to a record of 9.08 million barrels per day.
Meanwhile, in other aspects, central banks took global measures to try to weaken the economic impact of the pandemic, but these measures did little to strengthen the stock markets which are in a free-fall environment. Investors do expect a sharp decline in demand in the coming weeks anyway.
The US Federal Reserve cut its key rate to almost zero on Sunday, prompting the unplanned rate cut of the Reserve Bank of New Zealand to a record low.
Later, the Bank of Japan also intervened to further ease its monetary policy, and the central banks of the Persian Gulf also lowered its interest rates.
"The reaction to prices is understandable, given that lower interest rates and new programs such as bond purchases will not help combat the current weakness in oil demand," Commerzbank analyst, Carsten Fritsch, said.
