Oil prices drop to two-month lows
According to people familiar with the matter, Reliance Industries, the largest publicly traded company in India, and Aramco – the world’s oil largest producer - have cancelled their agreement for a stake in the Indian conglomerate. Aramco was eyeing the oil-to-chemicals (O2C) business.
Talks between the two broke down over how much Reliance’s business should be evaluated considering that the world is trying to move away from fossil fuels and reduce emissions. According to sources, the due diligence procedure was halted in “early-stage assessment.”
Aramco did not comment but stated that it would maintain its longstanding relationship with Reliance - the largest Indian buyer of Saudi oil.
The rumor comes at a time when the oil market is under pressure. Today, November 26, oil prices dived more than 5%, reaching a two-month low as the rise in COVID-19 cases is scaring investors. For December, the Economic Commission Board expects a surplus of 400,000 barrels per day, reaching 2.3 million BPD in January and 3.7 million BPD in February. In an effort to cool prices, the US is releasing millions of barrels of oil from strategic reserves in coordination with other large consuming countries.
Brent oil fell 5.6% to $77.54 per barrel, while Crude oil was down 6.6% to $73.19 a barrel.
Sources: investing.com, reuters.com
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