Oil rises to its highest level in 3 years .. Investors...

Oil rises to its highest level in 3 years .. Investors...
Oil rises to its highest level in 3 years .. Investors...

Oil prices rose yesterday, with Brent futures reaching their highest levels in more than three years as investors bet that supplies will remain limited.
News of the spread of the Omicron mutated from the Corona virus and the sharp growth in infections continues to put the demand for fuel in a major test, especially in Asia, but in return there is support for prices due to limited supply growth from the “OPEC +” alliance, in addition to the renewed level of geopolitical risks in the market .
He told Al-Eqtisadiah, oil analysts, that despite the continuation of the pandemic crisis and the exacerbation of the injuries of the mutant, the global economy is resisting as it learned from previous closure experiences, pointing out that economies are opening and growing as they consume more crude oil, as the world witnessed a recovery in oil demand to levels Pre-pandemic and achieved further growth above these levels.
Analysts pointed out that the US administration has recognized that the need for oil will continue and remain firmly established, explaining that everyone is currently convinced that oil and gas production cannot be stopped overnight.
Robert Stehrer, director of the Vienna International Institute for Economic Studies, said that there are fears of a decline in prices as a result of profit-taking, but the pace of weekly gains for crude oil is expected to continue for the fifth consecutive week in light of geopolitical risks in Eastern Europe, turmoil in Kazakhstan and Libya, and difficulties in increasing oil supplies from On the part of some producers of “OPEC +”.
He stated that the demand for oil is still strong despite the concerns surrounding the new variable Omicron, as many research and analytical circles at the international level still expect the continued rise in oil prices due to insufficient investment in new production, growing consumption and strong demand in light of the conviction that this variable is less It is more dangerous than the previous mutations and may not require patients to need intensive care or hospitalization.
For his part, Rudolf Huber, a researcher in energy affairs and director of a specialized website, said that the pace of gains will not be far from the oil market, and that the periods of price fluctuations will be limited to catch breath after relatively long waves of successive gains, especially in light of a number of international reports supporting this rise and an example of This week, the International Energy Agency was surprised by the strength of demand, after it had assumed in previous periods a slowdown in the growth of demand for oil in the short term.
He pointed out that previous estimates of the International Energy Agency proved inaccurate, as it bet excessively strongly on a massive growth in the generation capacity of wind and solar energy, and a strong increase in reliance on electric vehicles, which was likely to directly affect the demand for oil.
For his part, Matthew Johnson, an analyst at Occera International Consulting, stated that the oil market situation is reassuring and promising despite all the difficulties and adverse factors surrounding it that are difficult to anticipate due to the rapidity of their occurrence and the acceleration of changes in the global economy in light of the current crisis, highlighting the words of Fatih Birol, President The International Energy Agency said, “Demand dynamics are stronger than many market watchers had thought, mainly due to Omicron’s more moderate forecasts.”
He explained that many international institutions concerned with energy recently expected more closures to prevent the spread of the omicron variable from the Corona virus, while the reality was different, as the advanced economies found it difficult to agree on another closure of their economies and dealt with more caution and efficiency with the new wave and benefiting from experiences accumulated over the past two years.
In turn, Naila Hengstler, director of the Middle East Department at the Austrian Federal Chamber, said that the gains widened after previous estimates of an abundance of oil supplies were disappointed in the first quarter of this year, but the market has already witnessed impressive transformations, as there are some major producers, including Nigeria, Libya and Ecuador, experiencing turmoil. dangerous in oil supplies.
She pointed to the agreement of major international organizations, led by OPEC and the International Energy Agency, that the problem of lack of investment has become increasingly serious, as they warned that the world needs more new oil discoveries, while some organizations, specifically the Energy Agency, were recently betting more on clean energy resources and supporting plans The transition in the field of energy, explaining that the burden of providing supply is shifting more to “OPEC +”, while some members of the alliance suffer from a shrinkage of their spare capacity.
With regard to prices, oil rose yesterday, as Brent futures reached their highest levels in more than three years, as investors bet that supplies will remain limited due to pressures on production in large producers, while global demand was not affected by the spread of the new Omicron mutant from the Corona virus.
According to “Reuters”, Brent crude futures increased 40 cents, or 0.5 percent, to $86.46 a barrel during trading yesterday. Earlier in the session, contracts recorded $86.71 a barrel, the highest since October 3, 2018.
US West Texas Intermediate crude contracts also rose 58 cents, or 0.7 percent, to $ 84.40 a barrel, after reaching $ 84.78 a barrel, its highest level since November 10, 2021.
The gains follow a rally last week in which Brent crude rose more than 5 percent and West Texas Intermediate crude more than 6 percent.
Traders said that the high demand for oil purchases, driven by the lack of supplies, and indications that the variable Omicron did not affect demand, as it was afraid to push the prices of some types of crude to its highest levels in years, indicating that the rise in the price of Brent may continue for a longer period. The “OPEC +” group, which includes the Organization of the Petroleum Exporting Countries (OPEC) and allies of other producers, is gradually backing away from the production cuts that were implemented when demand collapsed in 2020.
But many small producers cannot increase supplies and others are wary of pumping more in the event of another setback in the Covid-19 pandemic.
On Friday, US officials expressed concern that Russia was preparing to attack Ukraine if diplomatic efforts failed. Russia, which is massing about 100,000 troops on the border with Ukraine, released pictures of its forces’ movement.
Two US officials and two energy sources told Reuters on Friday that the US government had held talks with several international energy companies about contingency plans to supply natural gas to Europe in the event a conflict between Russia and Ukraine disrupted Russian supplies.
On the other hand, US crude stocks fell more than expected to their lowest levels since October 2018, but gasoline stocks rose with weak demand, according to data from the US Energy Information Administration.
On the other hand, the OPEC crude basket rose, and its price reached $85.46 a barrel on Friday, compared to $84.72 a barrel the previous day.
The daily report of the Organization of Petroleum Exporting Countries (OPEC) stated yesterday that the price of the basket, which includes the average prices of 13 crudes from the production of member countries of the organization, achieved its fourth consecutive rise, and that the basket gained about three dollars compared to the same day last week, when it recorded 82.16 dollars per barrel.

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