Analysts: Oil market developments prove the correctness of “OPEC +” policies...

Oil analysts expected the continued decline in crude oil prices this week, after recording wide declines at the end of last week, in which Brent crude lost about 4 percent and US crude 5.4 percent, to its lowest level since last October, as a result of the high new Corona injuries in the country. Europe and the world and the tendency of the United States to use the strategic reserves of crude oil.
He explained to the “Al-Eqtisadiah” specialists that recent market developments come in support of the OPEC + policies, which have been cautious in increasing production by about 400,000 barrels per day, as it is preparing for a new ministerial meeting early next month, which may be held in light of wide declines in prices due to the renewed epidemiological situation and the return of closures. In Europe, expectations of a recovery in demand have diminished and the speculation of oversupply has increased.
They pointed out that all countries are currently under pressure from high rates of inflation and high prices of basic commodities.
In this context, Ross Kennedy, managing director of QHA Energy Services, says that crude oil prices are undergoing a new downward wave after market sentiment changed, and that Brent and West Texas Intermediate crude prices fell significantly to less than $ 80 a barrel in conjunction with the increase in epidemic cases. and threats of widespread closure in Europe.
He pointed out that the current price trends will not continue at a single pace, especially if the closure is lifted in Europe in the coming days, especially with the approaching holiday season, pointing out that market fundamentals remain supportive of oil and commodity prices, as total crude oil stocks decreased by five million barrels recently.
Damir Tesperat, director of business development at the international company “Technic Group”, believes that the oil market is falling remarkably, as Brent crude is moving away from the level of $ 80 a barrel due to the epidemic crisis and American measures, explaining that oil prices fell to their lowest level in six weeks during the past week. With the market anticipating the US administration’s measures to reduce gasoline prices.
He pointed out that the withdrawal from the US strategic oil reserves has been the focus of discussion by those concerned in the market for weeks and will not come as a surprise to observers, considering that the United States wants to provide an effective addition by urging Japan, South Korea, India and even China to release oil reserves simultaneously to reduce prices on a large scale.
For his part, Peter Bacher, an economic analyst and specialist in energy legal affairs, says that the increase in production from OPEC + will likely continue in the coming months and become more influential in the market in light of the faltering demand and the increase in potential US supplies, pointing to international reports that expect prices to fall further during the next year. .
He stated that the record rise in crude oil prices last October and the restriction of global supplies from OPEC + led to an increase in US production, especially from the main Permian Basin of shale oil, and drilling activity in the United States is expected to continue to grow, noting to the data of the company Baker Hughes concluded last week that the number of rigs present in the United States is currently 556, up from 244 this time last year.
In turn, Arvi Nahar, a specialist in oil and gas affairs at African Leadership International, points out that despite the current downward wave in the market, there are positive readings of the oil situation in the short term, as the International Energy Agency expected this week that a balance between global supply and demand may be on the horizon, Noting that increases in energy supplies, driven by the production of shale oil from the United States and elsewhere, may meet the needs of global demand in 2022.
She stated that due to the winter in the northern hemisphere, we began to witness sharp increases in Covid cases, especially in Europe and the United States, which required many European countries to return to strict closures and force vaccinations, which translates immediately to impeding the recovery of oil demand, but despite From this, mobility has not been restricted as extensively as in previous Covid waves.
On the other hand, with regard to prices at the end of last week, oil prices witnessed bearish transactions during the sessions of the week, as Brent crude futures fell by more than 4 percent, to close at 78.4 levels, the lowest levels that Brent had reached since the beginning of October (October). the past.
Texas crude futures also fell by more than 5.4 percent, to close at $ 76.4, the lowest levels that Texas crude had reached since the beginning of last month, and the main reason for the decline in oil is due to the return of fears in the markets with the increase in the number of cases infected with the Corona virus, the matter Which led to Austria doing a complete closure again, starting next Monday.
Most European countries are also witnessing a rise in the number of infections, as the Netherlands re-imposed some general closure measures early last week for an initial period of three weeks in an attempt to contain the spread of the disease, and German Chancellor Angela Merkel described the situation in Germany as tragic due to the high number of cases, which raised fears On the low demand for oil again.
What worsened the decline was that the United States held talks with the largest economies in the world such as Japan, China and India this week, in order to discuss the possibility of withdrawing from the strategic oil reserves in a coordinated move aimed at calming oil prices, which caused the price of most products to rise.
The United States is witnessing high levels of inflation during the past few months, as the consumer price index reached its highest level in nearly 30 years, and that discussion came after the United States, during the past weeks, appealed to OPEC + to bypass a previous plan to increase oil production by 400,000 barrels per day, starting from December, but OPEC+ rejected that proposal.
On the other hand, the “Baker Hughes” international report on US drilling activities stated in its weekly data that drilling activity in the United States continued to rise, with the number of rigs increasing by seven this week.
The report said the total rig count is now 563 – a number 253 more than this time last year, yet active rigs are still hundreds less than the 790 active rigs that were digging in the pre-Covid world.
He pointed out that the number of rigs drilling in the United States rose this week to 461 – an increase of seven rigs since last week and an increase of 230 since this time last year, while the number of gas rigs as well as various rigs remained the same as the number of gas-guided rigs reached 102.
The report pointed out that the Energy Information Administration’s estimate of oil production in the United States for the week ending on November 12 decreased by 100,000 barrels per day to 11.4 million barrels per day, noting that oil production is still much lower than the record level of 13.1 million barrels per day that Recorded last year before the outbreak of the epidemic in the United States.
The number of active oil and gas rigs in Canada now stands at 167, up 66 from the year, while the number of rigs in the Permian Basin increased by six this week, with 122 rigs added since last year.
The report stated that the rig count in the second most prolific basin in the country, Eagle Ford, added one rig this week as the total rig count in the Permian now stands at 278 with a total of 42 rigs in the Eagle Ford.