Specialists expected the continuation of fluctuations in crude oil prices this week after the end of last week, with losses amounting to 3 percent for Brent crude and 2 percent for US crude, due to the high frequency of new infections with the Coronavirus and renewed fears of a global economic recession.
He explained to Al-Eqtisadiah, specialists and oil analysts, that the drop in crude oil prices last week came despite efforts by “OPEC +” to tighten supply, and despite the improvement of oil stockpile data, due to the rise of the dollar and increasing fears that another wave of a virus pandemic Corona will lead to tighter lockdown measures and further stifle demand for crude oil.
Experts said that the uncertainty in the industry led to a decline in the prices of futures contracts in New York 2.1 percent during the week, especially in light of developments indicating the return of an abundance of supply, as oil traders monitored a sharp increase in Iraqi exports for the next month, as oil production showed in Libya signs of rising this week.
In this context, Ross Kennedy, managing director of “QHA” energy services company, says that the pandemic pressures are growing in the market, which is likely to continue the state of fluctuations and successive price fluctuations, pointing to the widening of concerns about the slowing economic recovery, indicating that the world looks forward to reaching To a reliable vaccine, which will lead to widespread reopening and a significant increase in travel, as everyone hopes for a recovery in demand and higher prices.
He explained that the prolonged epidemic hinders a real and stable recovery in the levels of consumption of crude oil and all other energy resources, but on the other hand we find positive expectations for Goldman Sachs, indicating that oil consumption currently is slightly more than 93 million barrels per day, and may rise 1.8 million per day until End of this year.
Damir Tsprat, Director of Business Development at Technic Group International, believes that stability is sorely absent from the turbulent oil market, although many believe that the bulk of the devastating impact of the pandemic on demand, which appeared last April, has been exceeded, stressing the need to preserve The stability and stability of the “OPEC +” agreement, because it is the guarantee for the absence of a new collapse in the market, as the best mechanism to limit the return of the abundant supply of crude oil to prevent the decline and deterioration of prices.
He pointed out that the major producers have succeeded so far in increasing coordination between them and controlling supply inflation to promote the market’s restoration of balance and stability, pointing out that Saudi Arabia and Russia have succeeded in leading the commitment of producers and have reduced their production significantly, which led to the depletion of stocks at sea and reduce the flow of shipments International markets.
For his part, Peter Bakher, an economic analyst and a specialist in energy legal affairs, says that the major producers do not have many options to support the balance in the market, and there is a focus on increasing production restrictions in order to support the tense prices up and down, indicating that Russia is the largest producer from outside. OPEC will ship quantities of the main Urals crude from its western ports next month, much less than the usual level, as part of efforts to enhance the commitment of cooperation with the “OPEC +” alliance, by maintaining production restrictions.
He indicated that efforts to reduce oil supply may gain new momentum if a possible strike occurs in Norway, which threatens to lose more than a fifth of its total oil and gas production, in the event that companies and labor unions fail to reach an agreement on wages next week, as well as support the market Also, expectations of the “Vitol” group suggest that global oil inventories will continue to decline for the rest of the year.
In turn, Arfi Nahar, a specialist in oil and gas affairs at African Leadership International, says that there are good indications of the success of the “OPEC +” plan in absorbing the surplus stocks, as it is the largest burden on the market, which is preventing the recovery of prices, pointing out that the reports International, indicating that world oil inventories have dwindled by about 300 million barrels since they peaked at 1.2 billion barrels at the beginning of the summer months, indicating that it is expected to decrease by about 250 million to 300 million barrels in the last quarter of this year.
She added that the tension in the market due to the pandemic injuries continues, as it is expected that the recovery of demand will be erratic in the coming months, especially since the consumption of jet fuel is still weak, as the aviation sector has not recovered in light of the crisis situation of the pandemic in most countries of the world, But hopes for a gradual recovery remain.
On the other hand, with regard to prices, at the end of last week, oil fell on Friday, registering a weekly decline of more than 2 percent, as the rate of Covid-19 infection increased worldwide, while oil supplies are heading to increase in the coming weeks.
Brent settled at $ 41.92 a barrel, up two years, while US West Texas Intermediate crude fell six cents to $ 40.25 a barrel. On a weekly basis, Brent lost 2.9 percent, and West Texas Intermediate lost 2.1 percent.
In the United States, the world’s largest oil consumer, the rate of casualties is increasing in the Midwest, while New York City, which was the most affected in the spring, is considering renewing the closure measures.
The country witnessed the death of more than 200,000 people as a result of the virus, and demand for fuel in the United States remains stagnant, as the pandemic restricts travel and undermines the recovery of the economy.
The average demand for gasoline in four weeks fell 9 percent, from its level a year ago. In other parts of the world, daily increases in HIV infections are reaching record levels, and new restrictions are imposed, which will likely restrict travel.
Meanwhile, the entry of more crude oil to the global market threatens to increase supply and reduce prices. Baker Hughes Energy Services said the number of US oil and gas rigs rose 6 to 261 in the week ending September 25.
Recently, Libya increased its production, and Shell temporarily leased the first crude tanker to be loaded at the Libyan port of Zueitina since January.
Meanwhile, three assessments based on tanker tracking data reported that Iranian oil exports rose significantly in September in defiance of US sanctions.
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