Crude oil production declines in January

Muscat: The Sultanate’s daily production of crude oil and condensates stood at 958,270 barrels during January 2020, with a decrease of 1.26 per cent compared to the daily production during December 2019.
The monthly report published by the Ministry of Oil and Gas said that the daily exported quantities of crude oil stood at 756,586 barrels, a decline by 17.88 per cent compared to the daily export rate during December 2019.
Crude imports by China rose by 3.20 per cent during January 2020 to reach 85.96 per cent of the total Omani crude oil exports compared to December 2019. In comparison, imports by Japan fell by 4.09 per cent compared to the quantities imported during December 2019.
The United Arab Emirates (UAE) imported 8 per cent of the Omani crude oil, India 4 per cent and Japan 2 per cent.
The crude oil prices dropped during January 2020 futures settlement trading (March Delivery 2020), compared to December 2019 for the major crude oil benchmarks around the world. The West Texas Intermediate crude oil at the New York Mercantile Exchange (NYMEX) has averaged $57.48 a barrel, a fall by $2.17 compared to December 2019 trading. Likewise, North Sea Brent blend on the ICE in London averaged $63.67 a barrel, and declined by $1.50 compared to December 2019.
Similarly, the average monthly price for Oman Crude Oil Future’s Contract at the Dubai Mercantile Exchange (DME) dropped by 0.9 per cent compared with the previous month. The official selling price for Oman Crude Oil during trading of January 2020, for the delivery month of March 2020, settled at $64.89 per barrel, fell by (60 cents) compared to February 2020 delivery. The daily trading market price ranged between $58.17 per barrel, and $70.45 per barrel.
The drop in crude oil prices during January 2020 trading is attributed to several factors that directly and negatively impacted prices.
Among the most prominent factors represented in an unexpected increase in commercial stocks of crude oil in the United States of America (USA), in addition to the outbreak of the new Coronavirus in China, which put the oil markets in critical conditions, which in turn reduced travel and energy demand. It is expected that the demand for oil in China will decline with the announcement by major refineries of reductions in the planned operating rates and the reduction of oil demand due to the outbreak of this virus, which led to a sharp drop in the Asian stock markets, as well as airlines reducing their flights to China.- ONA