Despite the difficulties and challenges of recovering demand for crude oil due to the rapid casualties of the Corona pandemic, especially in the United States and Europe, oil prices achieved weekly gains, with Brent crude gaining 0.2 per cent and US crude 0.7 per cent.
The technical committee of the “OPEC +” group held its meeting Thursday in preparation for the meeting of the ministerial committee to monitor production cuts headed by Saudi Arabia and Russia, which holds its monthly meeting virtually tomorrow, Monday, to review developments in the market situation and discuss the extent of producers’ compliance with production cuts quotas, especially the compensation required from previously faltering producers.
OPEC + producers are discussing the situation of oil supplies, especially since the group had previously planned to ease production restrictions as of January 2021 by reducing about two million barrels per day from the current level of cuts of 7.7 million barrels per day, but it faces a new problem related to the abundance of supply after the increases Rapid and unpredictable Libyan production in exchange for weak demand due to the epidemic injuries and economic closure in some European countries.
In this context, the Organization of Petroleum Exporting Countries (OPEC) quoted Dr. Khaled Al-Fadhel, the Kuwaiti Minister of Oil, confirming that this vital period in the oil industry remains OPEC ready to deal with and overcome many challenges, indicating that OPEC acts like a “bank.” The Global Central Oil Policy “bears all risks as an oil producer in light of the market swings while continuing to cover any current or future shortages by managing the supply in the group, which affects all over the world.”
A recent report by the organization pointed out that OPEC’s efforts to achieve balance in the oil market are in the interest of the crude oil industry as a whole, indicating that the continuous coordination between OPEC and outside it definitely shows the responsibility of producing countries to unify common policies that reduce the risks of the oil market and support the stability of the industry. In the interest of all parties, he pointed to the great support provided by the reports of the technical committee of “OPEC +” and the ministerial committee to monitor production cuts.
He stressed the importance of the 45th meeting of the Joint Technical Committee, which was held last Thursday hypothetically by video in preparation for the 23rd meeting of the joint ministerial meeting to monitor production cuts tomorrow, stressing that the two committees were mandated under the historic “Declaration of Cooperation” to review the conditions and prospects of the global oil market and monitor the levels of compliance with voluntary production adjustments. Approved by the ministerial meeting of OPEC and non-member states.
The report quoted Secretary-General Mohamed Barkindo as confirming that for more than six months, producers have worked side by side to confront the unprecedented market crisis in history, adding that the dark clouds of this epidemic are still hanging over everyone’s heads, pointing out that in some countries there are Indeed, a second wave exacerbates the human tragedy and economic uncertainty.
The Secretary-General indicated that the monthly OPEC report on the oil market expects global GDP to decline by about 4 percent this year, and then rebound in 2021 at a rate of about 4.6 percent. “Our forecast for 2020 remains oil demand at just over 90 million barrels per day, down 10 percent for this year,” the report added, quoting Barkindo.
Upon reviewing the long-term outlook for the oil market, the report clarified that OPEC believes that global demand for primary energy is rising and continuing to grow with a significant increase of 25 percent over the next 25 years, indicating that oil is expected to retain the largest share of the energy mix as it represents Close to 28 percent in 2045.
The report pointed out that the worst of the current crisis will be over, adding, “History has taught us that there is no end to the need for dialogue and cooperation to achieve a more sustainable and flexible energy system for the benefit of all.”
On the other hand, the “OPEC” report pointed to the importance of the role of the new members in the organization, pointing out that Equatorial Guinea – which joined the organization in 2017 – is an active member and participant in the major decisions of “OPEC” at the global level, pointing to the role of “OPEC” + “In promoting stability in the oil market.
The report quoted Gabriel Lima, Minister of Hydrocarbon Resources in Equatorial Guinea, confirming that cooperation between OPEC and outside it was effective in supporting stability in the oil market and providing a strong impetus not only to the global economy, but to Equatorial Guinea’s economy, as 75 percent of the country’s revenues come from The oil sector.
The report pointed out that “OPEC” provides all producers with a forum for the exchange of experiences between other producing countries. It also provides opportunities for training and information exchange at the technical level in particular, pointing to OPEC’s continued commitment to support market stability and help oil-producing countries to ensure the provision of energy in a manner. Effective, economic and stable for the member states and their global customers, pointing to the importance of OPEC’s efforts in cooperation with its external partners, especially Russia, in order to contribute to the stability of the global oil market, which in turn benefits consumers and the economy.
He noted Equatorial Guinea’s conviction that “OPEC” will continue to play a decisive role in ensuring the stability of the global market and supporting the growth of the oil sector in all countries.
On the other hand, with regard to prices at the end of last week, oil prices fell on Friday, as they were negatively affected by fears that a significant rise in Covid-19 infections in Europe and the United States was curbing demand in two of the largest fuel-consuming regions in the world.
In addition, a document seen by “Reuters” stated that there are fears that a long second wave of the Covid-19 pandemic and a jump in Libyan production will push the oil market into a surplus in supply next year, in expectations that are much darker than just one month ago.
Any excess supply may threaten the plans of “OPEC”, Russia and their allies, within the framework of what is known as “OPEC +”, to reduce the volume of production cuts they implemented this year by adding two million barrels of oil per day to the market in 2021, and the Organization of Petroleum Exporting Countries has not yet indicated. To any plan to cancel the increase in supplies.
The document, which was used at the committee’s monthly meeting in October, said, “Previous indications of economic recovery in some regions of the world are overwhelmed by the fragile conditions of the pace of recovery and growing doubts about them.” “In particular, the risks surrounding the economic recovery and recovery of oil demand may be complicated by the resurgence of COVID-19 cases around the world and the possibility of imposing partial isolation measures in the coming winter months,” she said.
Brent crude futures fell 23 cents to settle at $ 42.93 a barrel, and West Texas Intermediate crude futures fell eight cents to settle at $ 40.88 a barrel.
On a weekly basis, Brent rose 0.2 percent, while West Texas Intermediate was on its way to a 0.7 percent increase.
In Europe, some countries re-imposed curfews and general isolation measures to face a significant increase in new infections with the Coronavirus, while Britain imposed tighter restrictions to curb the spread of Covid-19 in London yesterday.
During a monthly meeting, which was conducted remotely last Thursday, a committee that includes officials from “OPEC +” known as the “Joint Technical Committee” examined its worst-case scenario.
This assumes that commercial oil inventories in the world’s largest consumers will remain high in 2021 compared to a five-year average, instead of starting to decline below that level.
A ministerial committee known as the “Joint Ministerial Monitoring Committee” will discuss the expectations when it meets Monday, and the committee may come up with recommendations on oil policy. OPEC will reduce the current supply cuts of 7.7 million barrels per day by 2 million barrels per day in January.
In the United States, energy companies have started increasing operating rigs after they had reduced them to a 15-year low in August. Energy services company Baker Hughes said this week companies added the largest number of platforms in one week since January, increasing the number by 12 to 205.
These were the details of the news The abundance of supply … a new problem facing the oil... for this day. We hope that we have succeeded by giving you the full details and information. To follow all our news, you can subscribe to the alerts system or to one of our different systems to provide you with all that is new.
It is also worth noting that the original news has been published and is available at saudi24news and the editorial team at AlKhaleej Today has confirmed it and it has been modified, and it may have been completely transferred or quoted from it and you can read and follow this news from its main source.