Analysts: OPEC is working hard to restore the balance of the oil market and is able to drain surplus stocks


Oil specialists and analysts expected the continuing fluctuations in crude oil prices during the current week after a decline at the end of last week due to fears of demand due to the acceleration of infections with the Coronavirus, but in return prices receive support from low stocks and OPEC + plan to restrict oil supply to control the possibility of a renewed glut. Supplies.
He told Al-Eqtisadiah, specialists and oil analysts, that the production increases initiated by the “OPEC +” coalition starting this month did not have a negative impact on prices due to the growth of domestic consumption and the gradual recovery of demand, especially with most of the world’s economies confirming that they will not return to a state of closure once. Other, even if the rapid rate of new cases of the Corona epidemic continues.
The specialists said that the meeting of the Ministerial Committee to Monitor Production Reduction in OPEC + for the third month in a row comes within the framework of the intensive and continuous evaluation of the market situation. The meeting is likely to reveal a new rise in the level of compliance with the production reduction among the 23 member states in the declaration of joint cooperation, especially with Iraq and Nigeria pledged to make additional cuts to compensate for the previous failure that contributed to the abundance of supply in the market in the past months.
The specialists pointed out that the group of producers in “OPEC +” has a long way to go, as they will need to do better than the current efforts of partnership and cooperation in order to restore balance in the market and get rid of the accumulated stock completely by the end of 2021.
In this context, Ross Kennedy, managing director of QHI Energy Services, says that the global economy is dominated by uncertainty, and expectations for a recovery in demand are still relatively slow, according to the assurances of the International Energy Agency and OPEC, which is likely to continue the pace of price fluctuations and fluctuations. The successive efforts made by the “OPEC +” coalition led by Saudi Arabia and Russia to support the market balance with all possible efforts.
For his part, Damir Tsprat, Director of Business Development at Technical Group International, believes that the challenges facing the global demand for crude oil are very wide, especially in light of the delay in reaching a critical vaccine to control the Corona pandemic that threatens the most powerful global economies, noting that most international energy institutions It is likely that global oil demand will not return to 2019 levels until at least 2022, indicating that previous estimates were overly optimistic and suggested that oil demand would return to 2019 levels by the end of next year.
He stated that the road to recovery will be long, especially since the land and air transport movements are struggling to return to near normal levels, as jet fuel and gasoline were affected more during the peak period of the epidemic and remained low until the restrictions were gradually eased, pointing to international reports confirming the decline in purchases of American tickets for international flights. 86 percent, year on year in June.
For his part, Peter Bakher, economic analyst and legal affairs specialist in energy, says that the task of global economic recovery requires the concerted efforts of all international efforts of producers, consumers and all parts of the industry, indicating that OPEC + is working with strong steps to restore balance in the market, and that has started with greater recognition. A reduction in the history of industry since last May and about ten million barrels per day, which is one tenth of the global oil supply.
He pointed out that the latest forecast of the International Energy Agency broadcast bleak prospects for global demand when it lowered its forecast for each quarter from now until the end of 2021, which reflects the sharp decline in fossil fuel consumption with the continuing escalation in the repercussions of the epidemic disaster, as it indicated that global oil consumption remains lower. 2 percent, higher than at the end of 2019.
Irvi Nahar, an oil and gas specialist at African Leadership International, explains that transportation in general is the main component in conventional energy consumption, which puts fossil fuels at the top of the energy mix, perhaps for decades to come, but the epidemic crisis has pushed the aviation and road transport sectors, two essential components of oil consumption, onto a path. Suffering hard due to steep downward pressure on consumption.
She added: “The adverse conditions of the crude oil market did not frustrate the producers’ will to achieve good achievements and steps on the road to recovery, indicating that despite the deteriorating demand expectations from international agencies, the OPEC + group was and will continue to be able to deplete the excess oil stocks that accumulated during First half of 2020 by the end of next year. Global oil inventories are expected to decline to levels at the end of 2019 in the last quarter of next year.
On the other hand, with regard to prices at the end of last week, oil prices retreated last Friday on the back of fears that the recovery in demand will be slower than expected due to the closure measures associated with the Covid-19 pandemic, while the increase in supply also casts its shadow on optimism about the decline in crude stocks And fuel.
The International Energy Agency and the Organization of the Petroleum Exporting Countries (OPEC), two of the largest exporters of forecasts, this week cut their forecasts for oil demand in 2020. OPEC and its allies are raising production this month.
“The widespread question is whether the spread of the Coronavirus will continue to affect the recovery of demand for gasoline and diesel,” said Andrew Lipo of Lipo Oil Associates in Houston.
Brent crude settled, down 16 cents, to $ 44.80 a barrel. US West Texas Intermediate crude lost 23 cents to $ 42.01 a barrel. On a weekly basis, Brent rose 0.9 percent, and West Texas Intermediate rose 1.9 percent.
Prices were supported this week by US government data, which showed that stocks of crude oil, gasoline and distillates decreased last week, as refiners intensified production and improved demand for oil products.
According to data from Baker Hughes Energy Services, the number of oil and gas rigs operating this week in the United States, an indicator of future supplies, fell to an unprecedented low for the 15th week in a row.
OPEC and allies including Russia, in what is known as the “OPEC +” group, have been reducing production since May by about 10 percent of global demand before the pandemic to support the market, and the agreement includes an increase in production this month as demand recovers. It is scheduled to meet a committee of “OPEC +” next Wednesday to study the market.


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