“World Oil”: The oil markets are closer to the pace of...

Crude oil prices ended the week’s trading on a decline, after a partial return to US oil supplies following a widespread halt as a result of two successive hurricanes, but they gained on a weekly basis, as Brent crude rose 3.3 percent, and American crude rose 3.2 percent, supported by the scarcity of supplies caused by Supplies were halted due to the hurricane, in addition to the spread of Corona vaccines and the decline in US oil stocks, which are among strong indicators of the recovery in global demand.
During the market’s performance last week, Brent crude hit its highest levels since late July and US crude hit its highest levels since early August. Achieving broader price gains for crude oil is inhibiting the return of Libyan production after a period of turmoil due to protests in the main oil fields, in addition to the impact of the monthly increase in oil supplies by the “OPEC +” group of 400,000 barrels per day, in addition to the gradual recovery in American production.
In this context, the “World Oil” international oil report indicated that the crude oil markets are still suffering from tensions, lack of balance and stability, which increases the fluctuations, but in general the market is closer to the pace of the rise, pointing out that at the same time products are traded, such as Propane used for heating is at a multi-year high due to seasonal high winter demand in Europe, the United States and the Northern Hemisphere, as well as higher natural gas prices. He stated that crude oil prices achieved weekly gains for the fourth time in a row due to positive market sentiment, and were supported by signs of market tightening due to the recovery in demand, which led to a broader recovery in energy prices.
He explained that West Texas Intermediate crude fell, last Friday, at the end of trading for the week, but rose by about 4 percent on a weekly basis, as investors were tracking the strong rises in other energy commodities, especially natural gas, which jumped by about 45 percent, so far during this quarter; This stimulated the possibility of accelerating the pace of the transformation in the field of fuel. The report stated that crude oil prices also received strong support due to the impact of recording more effective declines in crude oil and gasoline stocks in the United States, and that the rise in prices is offset by increasing indications that the US administration has become uncomfortable with the indirect effects of the rise in prices, as US President Joe Biden said “His administration is studying the repercussions and effects of high gasoline prices on the national economy,” while China said this week that it “will sell an important part of its strategic crude oil reserves.”
The report pointed to the expectations of the German “Commerzbank”, which confirms that the oil market will remain tight until the end of this year, “the supply of tightness”, despite the planned increases by the Organization of Petroleum Exporting Countries and its allies, the “OPEC +” group.
Senior analysts at Danske Bank were quoted as saying, “Crude oil prices rose this week due to the more stringent oil market conditions, and the market also witnessed a sharp decline in US oil inventories last week, but also the indirect effects caused by the sharp rise in European energy prices.
Focusing on high energy prices across Europe, the report quotes Fatih Birol; The Executive Director of the International Energy Agency, that gas prices may remain high for weeks due to strong demand, is likely to surprise the market to see oil above one hundred dollars a barrel due to supply constraints in exchange for the strong recovery in demand this year.
On the other hand, a report by the international “Platts” agency for oil information stated that “less than 25 percent of American Gulf crude is still stopped working after Hurricanes Ida and Nicholas, while about 95 percent of energy has been restored in Louisiana after Ida.”
The report indicated that less than a quarter of crude oil production is still closed in the US Gulf of Mexico and about a third of natural gas production, nearly three weeks after the outbreak of Hurricane Ida, which swept the coast of the Gulf of Louisiana.
He stated that because of its light track on the Texas coast, Hurricane Nicholas did not cause the production of many oil facilities in the American Gulf to stop, unlike Hurricane Ida in late August, while deep-water projects were affected more than Hurricane Nicholas.
He pointed out that with regard to pipelines and energy in Texas, production operations have mostly returned to normal after Hurricane “Nicholas”, pointing out that port tenants are currently assessing the damage caused to them. The report noted that a large part of the return of US onshore infrastructure depended on restoring electricity, pointing out that the major utilities company in Louisiana confirmed that energy was restored to 96 percent of customers who lost electricity, with the reform efforts to be completed by the end of this month.
He added that “of the approximately 2.2 million barrels per day of crude oil refining capacity that was shut down in Louisiana due to Hurricane Ida, less than 500,000 barrels per day will remain out of order in the long term, while there are no refineries in Texas that were closed due to Hurricane Nicholas.”
On the other hand, with regard to prices, at the end of last week, oil prices fell on Friday as energy companies in the Gulf of Mexico region in the United States resumed production, after two successive hurricanes in the region halted production.
Brent crude futures fell 33 cents to settle at $75.34 a barrel. US West Texas Intermediate crude futures fell 64 cents to settle at $71.97 a barrel.
Over the course of the week, Brent rose 3.3 percent, and US crude rose 3.2 percent, supported by tight supplies caused by the hurricane’s supply disruption. Friday’s decline came after five consecutive sessions of gains for Brent crude, with Brent on Wednesday hitting its highest level since late July, and US crude hitting its highest level since early August.
Crude oil exports flowed back from the Gulf Coast again after Hurricanes Nicholas and Ida drained 26 million barrels of offshore production. Reuters reported on Thursday that the resumption of activities continued with the suspension of about 28 percent of US crude production in the Gulf of Mexico.
US energy companies this week added oil and natural gas rigs for the second week in a row, although the number of offshore units in the Gulf of Mexico remained unchanged after Hurricane Ida hit the coast more than two weeks ago.
Energy services company Baker Hughes said 14 offshore rigs in the Gulf of Mexico closed two weeks ago due to the continuing shutdown caused by Ida. Last week, four offshore rigs returned to service.
Baker Hughes said the number of oil and gas rigs, an early indicator of future production, rose nine to 512 in the week ending September 17, the highest level since April 2020.