Saudi Arabia Announces to Revive Oil Production with Two Big Refineries
Published By : 05 Aug 2015 | Published By : QYRESEARCH
Oil prices will continue to remain volatile as Saudi Arabia announces its plan to revive its refining activities. This announcement will push other refineries to reduce their operations, which will lead to a huge pool of crude oil. As two new refineries start operations in Saudi Arabia, they are expected to add generously to the supply of jet fuel and diesel. This would obviously translate to other refineries using far lesser crude to balance out the excess oil products and oversupply.
Currently, oil prices are pegged at USD 50 per barrel. However oil pricing continues to be under pressure due to oversupply of fuel from refiners, who are happy with good profit margins from cheaper crude due to OPEC output and shale boom in US.
The new Saudi refineries will give a fresh impetus to the world’s largest exporters and swamp the global market with A big difference now is that the world's largest oil exporter, Saudi Arabia, whose new refineries have added to a flood of the fuels now swamping global markets.
At the start of this year, Yasref refinery, which produced 400,000 barrel per day, reached full production. Jubail refinery also reached full capacity during late 2014 by reaching a production of 400,000 barrel per day.
Europe and Asia have started storing jet fuel and diesel as increasing consumption has increasing consumption has been unable to match the speed of production.
The tremendous production in Europe and United States has also contributed to overhang. Refineries are still working hard toward supplying drivers in regions such as United States and India, as gas consumption in these regions happens to be at peak with prices nearly halved over the last year.