New York lender JPMorgan says Saudi’s oil market share set to hit the peak of 1980s



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New York lender JPMorgan says Saudi’s oil market share set to hit the peak of 1980s

The OPEC-kingpin Saudi Arabia’s crude oil market share might have reached its highest level since the 1980s as investors became reluctant to invest into the black gold amid a multi-year low crude oil price alongside a frustrating demand crunch stemmed from the pandemic outbreak, a report from the New York City-based American multinational lender JPMorgan Chase & Co. had revealed.

In point of fact, crude oil futures’ prices fell by more than 40 per cent this year thus far as an unprecedented scale of demand crunch had made its debarkation following a global-scale pandemic outbreak alongside an oil price war over market share between Riyadh and Moscow, which according to JPMorgan could lead to a decline of at least $625 billion in spending in the oil and natgas industry by the end of this decade.

Besides, a JPMorgan analyst Christian Malek was quoted saying to a press agency that a significant scale of slump in investment could push the Brent crude futures’ prices over $60 per barrel over the next couple of years.

Although a month earlier Brent crude was trading $16 per barrel, paring some of its earlier losses by today it has been trading near $40 per barrel.

Saudi likely to emerge as market leader after slump in investments and prices

Aside from that, while the New York City lender was expecting the global crude oil demand to reign at 91 million barrels per day, roughly 9 per cent lower than a prior estimate, JPMorgan analyst Malek said, “Saudi Arabia will emerge victorious in the fight for market share, while non-OPEC and US production will decline,” adding that Saudi requires the lowest amount of liquidity to pump up crude oil that in effect would eventually prepare it better to regain a lion-share of vacant niche in the crude oil market.

Besides, the JPMorgan analyst had also forecasted a holocaust for the US Shale production, which require a minimum of $40 per barrel US crude futures’ prices to make profits, adding that the US sector would likely to witness a contraction or an insignificant extent of growth.