Although the price war is now over, crude oil is still weak because of low demand caused by the quarantine measures. Varieties such as Russian urals, US mars, and several Abu Dhabi grades of oil have been offered to customers in recent weeks, because supertankers filled with unsold oil have been transported to Asia.
Oman and Upper Zakum are also available, and are sold on a flexible basis, allowing customers to choose their preferred arrival periods.
Aside from oversupply, oil companies are facing continued declines in demand. Earlier this week, Iraq said that it was having problems selling oil due to oversupply and lower prices.
Kuwait, Iraq and Abu Dhabi, will release their official oil prices soon.
Meanwhile, a researcher from a major Chinese oil company said that China should copy the hedging strategies of Mexico and US shale companies to protect oil prices from falling.
Dai Jiaquan, director of oil market research department at China National Petroleum Corp. Research Institute of Economics and Technology, said that most of China's oil production is unhedged.
"Chinese firms should use derivatives to ensure stable returns on the oil they sell," Dai Jiaquan said in an interview published in CNPC's China Petroleum Daily. According to him, this process has become easier, thanks to futures on the Shanghai International Energy Exchange.
"Now that the Shanghai oil futures are listed and functioning normally, it is necessary to fully use the financial resources to hedge the risk of price fluctuations," he said.
This year, oil prices in China have fallen by about half, straining the finances of state-owned oil companies. Nevertheless, the country is still the largest oil importer in the world.
The US Department of Energy is negotiating with nine companies to lease space in order to store about 23 million barrels of oil, as part of a proposal to help drain the country's growing oversupply. The Department of Energy said that most of the oil will be delivered in May and June, and crude oil will be distributed to all four storage locations in Texas and Louisiana. "You have two options for oil production - either use or store," US Energy Secretary Dan Brouillette said.
President Donald Trump sought to help the US shale industry, after vast areas of the world closed due to quarantine, which led to the drop of oil demand.
OPEC+'s agreement of reducing production by 9.7 million barrels per day is the largest coordinated reduction in history. Unfortunately, this reduction is overshadowed by the low demand for oil, so oil prices keep on falling.
