01:15 GMT07 July 2020
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    Oil Prices Slump, Coronavirus Fears Send Global Economy Into Turmoil (103)
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    The deal was reached by global oil-producing countries on 12 April against the backdrop of a steep fall in oil prices, which since the end of February have lost $28 per barrel.

    The market price for Saudi Aramco shares continued to fall on 13 April after losing $0.40 or 1.24% of their price on 12 April amid the news that a new OPEC+ deal stipulating major cuts in global crude production had been signed. On 13 April, the price per Saudi Aramco share initially jumped from 31.65 to 31.80, but later started gradually falling losing $0.55 or 1.74% in comparison to the previous day's close as of 11:35 GMT.

    Saudi Aramco's current share price is slightly lower than their initial $32 per share price during the company's IPO in December 2019. Back then the firm, previously solely owned by the Saudi government, allowed the sale of 1.5% of its value in the form of shares listed on the Saudi Tadawul stock exchange, thus raising some $25.6 billion.

    New OPEC+ Deal and Oil Output Cuts

    The company's shares started falling on the same day members of OPEC+ and other oil-producing countries agreed to a new reduction of crude output to deal with slumping oil prices. The latter have nosedived almost $30 in the last two months amid the coronavirus pandemic and the collapse of the previous OPEC+ deal.

    Pump jacks operate at sunset in an oil field in Midland, Texas U.S. August 22, 2018. Picture taken August 22, 2018
    © REUTERS / Nick Oxford
    Pump jacks operate at sunset in an oil field in Midland, Texas U.S. August 22, 2018. Picture taken August 22, 2018

    The new deal stipulates a gradual global reduction in oil output over two years with the initial slash in production being 9.7 million barrels per day. However, Saudi Arabia, Kuwait, and the United Arab Emirates  have volunteered to reduce their output by even greater numbers than the deal suggests, jointly removing 12.5 million barrels per day from the market.

    The set of measures was directed to raise crude prices, which remain under the pressure of falling consumption and demand caused by the COVID-19 pandemic. When the opening bell sounded on 13 April, black gold's price tag soared from $31.78 to $33.17, however, this moderate gain was later lost over the next few hours with the price for Brent plunging to $31.36 or by 1.38%.

    Topic:
    Oil Prices Slump, Coronavirus Fears Send Global Economy Into Turmoil (103)

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    OPEC, oil prices, Oil, Saudi Aramco, Saudi Arabia
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