Saudi Finmin: Govt took measures to curb impact of oil price drop – SPA

The acting Saudi Finance Minister has said that the government has taken measures to curb the impact of the oil price drop and that they will take additional measures to deal with expected prices decrease. 

Key notes

• Says because of impacts of coronavirus items of expenditures will be reviewed and appropriate decisions will be made in a timely manner –  state news agency SPA.
• Says Saudi government has agreed on cutting 50 billion riyals, representing less than 5% in 2020 budget – SPA. 

Market implications

The price of West Texas Intermediate crude for April delivery on the New York Mercantile Exchange dropped $6.58, or more than 24%, to settle at $20.37 a barrel, which was the lowest finish since Feb. 20, 2002. 

Due to COVID-19, countries continue to lock down to slow the spread of the pandemic and to make matters worse, Saudi Arabia and Russia remain on track to flood the world with crude in a global price war. Prices are in desperate need of price internvention and a production cut agreemnet btween OPEC+.