Foggy controls oil market trades … and 3 factors push prices back down


Oil prices fell in global markets yesterday, influenced by the growing uncertainty about the global recovery in demand for fuel and the rise in cases of Covid-19 in several countries and the preparedness of major producers to ease restrictions on production.
According to “Reuters”, the standard American crude oil for August delivery fell 16 cents to settle at 40.59 dollars a barrel yesterday, as Brent crude for September delivery fell 23 cents to 43.14 dollars a barrel.
The price of gasoline in August delivery fell one cent to $ 1.22 a gallon, while heating oil fell 1 cent to $ 1.22 a gallon. Natural gas fell 1 August in August to $ 1.72 per 1,000 cubic feet.
The United States announced at least 75,000 new cases of Covid-19, a daily record, while Spain and Australia announced their largest daily jump in cases in more than two months, and cases continued to rise in India and Brazil strengthened general isolation measures.
The rise in coronavirus infections slows the recovery of fuel consumption after the easing of general isolation measures in the United States and other countries, raising fears that recovery from consumption of the pandemic may take years.
The benchmarks fell 1 percent yesterday, after the Organization of Petroleum Exporting Countries (OPEC) and its allies agreed, in what is known as “OPEC +”, to reduce the supply cuts of 9.7 million barrels per day that were applied earlier this year by two million barrels per day. Starting in August.
But Vivek Dahar, a commodity analyst at the Commonwealth Bank of Australia, said that the actual increase in production cuts would exceed 2 million bpd, as countries like Iraq, whose production had increased compared to their pledges to cut supplies in May to July, agreed to implement a cut Akbar in August and September.
Dahar said that the market has received some support from agreeing to some compensation for the previous non-compliance with the pledges while the uncertainty about the growth of demand is growing. “OPEC” recommended moving to the second stage of the plan to cut production by easing the restrictions of the cuts starting from next month, bringing the size of the cut to 7.7 million barrels per day instead of 9.7 million barrels, which was applied over the past three months.
And presented at a meeting of the Ministerial Committee to reduce production, which was held recently, a positive vision of the market confirms confidence in the recovery of demand, and the continued compliance of producers with the supply restriction plan, as this vision also includes the need to reduce the restrictions of the reduction at this stage, given the high local consumption in the summer months in most producing countries In the Middle East.
Official data yesterday showed that Saudi Arabia’s total oil exports, including crude and oil products, decreased to 7.48 million barrels per day in May, from 11.34 million barrels per day in April.
The Kingdom and other member countries of the Organization of Petroleum Exporting Countries (OPEC) submit monthly export data to the Joint Data Initiative (Jodi), which it publishes on its website.
Saudi May oil exports were affected by the sharp drop in crude exports 41.2 percent, equivalent to 4.217 million barrels per day compared to the previous month. Crude exports reached 6.02 million bpd in May, compared to 10.237 million bpd in April.
In contrast, exports of Saudi oil products increased by 358 thousand barrels per day during May (May) on a monthly basis. Product exports reached 1.456 million bpd, compared to 1.098 million bpd in April. Saudi Arabia’s oil stocks increased by 4.06 million barrels, to reach 147.6 million barrels at the end of May.
The meeting of “OPEC +” broadcast a positive atmosphere in the market, especially emphasizing the growth of demand and the continued improvement in compliance of producers and its rise to 107 per cent, where it is expected that this will have a good return on prices in the coming period, despite the return of about two million barrels per day additional to The show starts from next month.
And OPEC + producers applied, for nearly three months, record and historical restrictions on production to offset the effects of the devastating global epidemic of demand, and the return to a lower level of reductions is an expected step due to the satisfaction of the producers led by Saudi Arabia and Russia about what has been achieved in the past months and their strong desire to be The discounts are accurate and calculated and do not lead to major losses in market shares.
The International Energy Agency has expected oil prices to stabilize around $ 40 a barrel in the coming months.
On the other hand, the OPEC crude basket increased and recorded its price at 44.12 dollars a barrel last Wednesday, compared to 43.02 dollars a barrel the day before.
The daily report of the Organization of Petroleum Exporting Countries (OPEC) said yesterday that the price of the basket, which includes the average prices of 13 raw products of the member states of the organization, achieved the first rise after several previous declines, and that the basket gained about one dollar compared to the same day of the last week in which it was registered 43.44 dollars a barrel.


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