World oil prices expanded from their decline on Friday to lose more than 5% during the American market, to continue crude oil losses for the second day, recording the lowest level in 15 months, and Brent crude for the fourth consecutive day, recording the lowest level in nearly three years, to move prices towards the second incurred A weekly loss in a row, due to Russia’s refusal so far to agree to the initial OPEC agreement to make an additional reduction of about 1.5 million barrels per day, pending what will result officially from the OPEC Plus meeting currently held in Vienna.
American crude fell 5.8% to the lowest level of $ 43.31 since December 26, 2018, from the opening level at $ 45.99, and recorded the highest level at $ 46.37, and Brent crude fell 5.9% to the level of $ 47.04 per barrel, the lowest since July 2017 , From the opening level at $ 50.03, and recorded the highest level at $ 50.42.
When prices settled on Thursday, US crude lost 2.5%, in the second loss in the last three days, and Brent crude futures fell 3%, in the third daily loss in a row.
In terms of trading this week, global oil prices lost an average of 4%, in connection with incurring the second weekly loss in a row, in light of expectations of weak global demand levels due to the outbreak of the Corona virus, along with renewed supply fears in the United States.
The meeting of the Organization of Petroleum Exporting Countries (OPEC) on Thursday resulted in an initial agreement to make an additional reduction in production by about 1.5 million barrels per day during the second quarter of this year, the largest reduction since the height of the global crisis in 2008.
And the world organization stipulated to move forward in the implementation of this agreement, the necessity of the participation of its allies from the independent producers, and so far Russia refuses to make an additional reduction and only extend the existing agreement until the end of this year.
In the event of approval of the new agreement, the total of the new cuts will be 3.2 million barrels per day, or 3.2% of global production, implemented only during a three-month period from April 1 to June 30 next.
OPEC stressed the re-evaluation of the impact of the new cuts at its meeting on June 9, and stressed that the new proposal is awaiting approval by Russia and the independent producers during the meeting on Friday.
Whereas, discussions are scheduled to be completed today in Vienna between OPEC producers and its allies from non-OPEC producers known as the “OPEC Plus” alliance, with a view to taking a final position on the current production cut agreement of about 1.7 million barrels, which officially ends on March 31.
And OPEC ministers said yesterday that they will make a recommendation to the OPEC Plus coalition, that the additional oil production cuts of 1.5 million barrels per day continue until the end of 2020 instead of continuing during the second quarter only.
A high-ranking Russian source told Reuters on Friday that Moscow would not support OPEC’s call for additional production cuts, and would only agree to extend the current cuts for a new period of time.
The US Energy Agency announced on Wednesday the increase in commercial stocks in the country by about 0.8 million barrels in the week ending February 28, in the sixth weekly increase in a row, below experts’ expectations, an increase of about 2.8 million barrels.
According to these data, total commercial stocks in the United States increased to about 444.6 million barrels, which is the highest level since the week ending December 13th, in a negative sign of the levels of domestic demand in the largest oil consumer in the world.
As for American production, it increased last week by 100,000 barrels, bringing the total to 13.1 million barrels per day, which is the highest level of oil production in the country, and the United States is currently the largest oil producer in the world.