Oil specialists and analysts expected the continuation of price gains for crude oil this week, after the market closed last week at the highest level in three years, and Brent crude achieved the fourth weekly gain and US crude the sixth weekly gain in a row.
The gains are due to the continued shrinkage of oil stocks and the decline of the dollar, in addition to the difficulty of returning American oil supplies to levels before Hurricane Ida, in addition to the decline in fears of the “delta” variable from the Corona virus in light of the spread of vaccines and the recovery of air traffic, especially in the United States.
On Monday, the work of the 21st Ministerial Meeting of Energy Ministers of the Organization of Petroleum Exporting Countries “OPEC” and their independent partners, the “OPEC +” group, will be launched via video, chaired by Prince Abdulaziz bin Salman, Minister of Energy of Saudi Arabia, and the participation of Alexander Novak, Deputy Prime Minister of the Russian Federation, to discuss oil market developments and determine the appropriate level of supplies. For next November, in light of developments in supply, demand and stocks.
There is speculation in the oil market about the possibility of the group adopting a monthly increase next month greater than the increase agreed upon in the last July meeting, amounting to 400,000 barrels per day, in order to meet demand growth and the unexpected decrease in stocks, in addition to compensating for the shortfall in the return of American supplies to market.
He explained to “Al-Eqtisadiah”, analysts and oil specialists, that part of the problem in increasing the group’s supplies is that some members of “OPEC” such as Angola and Nigeria are struggling to revive production at a time when they are struggling with operating disturbances and investment restrictions.
In this context, Ross Kennedy, managing director of QHA International Energy, says that the market witnessed over the past week a rise in oil prices along with stock markets, noting that the results of the “OPEC +” meeting will have an immediate impact on prices. , especially if it was agreed to increase supply, a decision that could calm the pace of price rise.
He added that the market outlook is positive and optimism about the recovery in demand continues, which led to a rise in futures contracts by 1.1 percent, on Friday. The US benchmark also recorded weekly gains for the sixth time in a row, which is the longest series of weekly increases since early July.
Damir Tesperat, director of business development at Technic Group International, adds that the increase in “OPEC +” oil supplies is the focus of interest and strong speculation in the market, especially since senior “OPEC” officials previously talked about the flexibility of supplies and the possibility of adjusting them according to the developments of the situation in the market, specifically with the vision of Strong and sustainable recovery of demand which is already beginning to materialize.
He pointed out that many countries in the “OPEC” do not have the ability to increase production much, but the group in general is keen to maintain unity and consensus among the 23 member countries of the alliance and to exclude individual positions and focus on collective in the interest of market stability and the balance of supply and demand, which meets in Ultimately the aspirations of producers and consumers alike and boosts the global economy.
For his part, Peter Bacher, an economic analyst and specialist in energy legal affairs, explains that price gains seem logical in the current market conditions with the intensification of demand growth, especially after China ordered its state-owned companies to secure energy supplies for the winter at any cost, as Beijing insists on overcoming any crisis in the region. Energy after the sharp rise in oil and gas prices.
He explained that most analysts’ reading of the market’s situation and fundamentals at the current stage is in the interest of the rise in oil prices, supported by strong indications that demand has exceeded supply in the coming months, while the expectations of global demand for crude oil and fuel in the future remain very strong.
Arvi Nahar, a specialist in oil and gas affairs at African Leader Ship International, indicates that the gains in oil prices will remain the prevailing pace in the market as long as the gas crisis in Asia and Europe continues to escalate, noting data issued by “JP Morgan”, confirming that the exacerbation of crises Natural gas in Asia and Europe will stimulate many energy generators to switch to petroleum-based fuels, so that the price of Brent crude is likely to reach $84 per barrel by the end of this year.
She pointed out that gas pressures on oil are the most prominent feature in the past days, and it will certainly be the focus of the discussions of the “OPEC +” ministers at Monday’s meeting. It is also likely to add more upward pressure to the already high prices of coal and liquefied natural gas, as well as oil products, including That’s fuel oil, diesel and propane, which are used to generate electricity.
On the other hand, with regard to prices at the end of last week, oil closed above the level of $78 a barrel on Friday to be close to the highest level in three years, which it reached earlier this week, supported by expectations that “OPEC” ministers maintain a moderate pace to raise production. .
The Organization of the Petroleum Exporting Countries and its allies, within the framework of the “OPEC +” group, meet on Monday, and the group is working to gradually cancel the unprecedented production cuts they adopted last year, but sources say they are considering doing more than that.
Brent crude rose 97 cents, or 1.2 percent, to $79.28 upon settlement, marking the fourth consecutive weekly rise. US West Texas Intermediate crude advanced 85 cents to reach the settlement price of $75.88, with the sixth week of gains recorded.
US energy companies this week increased oil and natural gas rigs for the fourth consecutive week, as more offshore units damaged by storms resumed service in the Gulf of Mexico.
Energy services company Baker Hughes said in its closely watched report on Friday that the number of rigs rose by seven to 528 in the week to October 1, the highest level since April 2020.
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