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1 1 (March 17, 2020)

handle is hein.crs/govciyt0001 and id is 1 raw text is: Researh Service Low Oil Prices and U.S. Oil Producers: Policy Considerations March 17, 2020 Global oil prices have declined by more than 50% since January 2020 (see Figure 1). Following a brief period of geopolitically-driven upward price pressure resulting from events in Iraq and Libya, world oil supply/demand balances were projected to be oversupplied by the second quarter of 2020. Reduced travel and other potential economic impacts related to the evolving COVID- 19 outbreak are suppressing near- term oil demand. Oversupply expectations were amplified when the Organization of the Petroleum Exporting Countries (OPEC) and a group of non-OPEC countries (OPEC+), including Russia, failed to agree on an OPEC recommendation to reduce oil production by 1.5 million barrels per day until the end of 2020. Oil prices immediately declined. Subsequently, Saudi Arabia announced regional price discounts and plans to increase oil supplies in April. Other countries have also indicated intent to increase oil production. This combination of demand suppression and supply expansion increases short-term oversupply expectations and exerts downward pressure on oil prices. Prolonged periods of depressed prices could affect U.S. oil production (approximately 12.2 million bpd in 2019, the world's largest), exports, employment, and industry consolidation. Due to recent developments, a plan to sell crude oil- required in FY2020 by P.L. 116-94-from the Strategic Petroleum Reserve (SPR) was suspended. Congressional Research Service https://crsreports.congress.gov IN11246 CRS }NS GHT Prepared For Members and Comrmitees of Conrss .....

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