Analysts: The rise in oil futures prices compared to “spot” predicts a further rise


Crude oil prices tended to rise after a temporary halt, due to profit-taking, as it recorded its highest level in 13 months due to the large and unexpected decline in the level of US oil inventories.
The rise supports the production restrictions applied by the “OPEC +” group, in addition to the Saudi voluntary reduction, in addition to the spread of Corona vaccines and the growing hopes for a recovery in global demand for crude oil during the current year.
Specialists and oil analysts told Al-Eqtisadiah that the rise in oil prices also contributes to the restrictions imposed on production by American producers, in addition to strong indications of a gradual return to demand, which led to the fact that we are currently witnessing that the future price of oil is higher than the current price or “Spot” price, which heralds further price rally in the long run.
The specialists pointed out that the new and broader engine affecting oil prices is the expectation of the continued success of the fiscal stimulus plan for the US economy, which led to a tangible improvement in the US growth and job expectations data.
The specialists explained that demand is recovering under the influence of the Chinese economy’s recovery again, while Western economies were swinging with the escalation of the virus and the emergence of a new outbreak, pointing to positive expectations issued by Goldman Sachs, which is likely to sell Brent crude at $ 65 by the end of 2021 and surpass crude The US $ 60 level this year.
In this context, André Gross, director of the German company “MMAC”, says that the oil market is experiencing a state of good momentum after a series of successive gains, which pushed prices to the highest level in 13 months, with slight stops to take profits, indicating that Expectations are for West Texas Intermediate crude to surpass $ 60 a barrel as well.
He pointed out that the factors supporting prices are stronger than the negative factors, which are currently focused on the continuing infections of the Corona epidemic, the emergence of mutated strains and the expansion of closures, in addition to the difficulties in distributing new vaccines, pointing out that one of the main drivers of prices will keep the level of stocks that came last week low. More than previous expectations, which led to reaping greater price gains.
For his part, Vittorio Musazzi, director of business development at the Italian energy company “Sanam”, says that data in support of the market recovery were issued by the International Energy Agency, which suggested an acceleration of withdrawals from oil stocks in the second half of this year and a gradual return of stocks to the average level in five years. And get rid of the surplus, which formed a great burden on demand in the past year.
He pointed out that a tangible recovery occurred in fuel consumption and in the resumption of travel activities despite warnings in some countries and the emergence of mutated strains of the virus, pointing to the Energy Agency data indicating that the level of stocks is currently 50 million barrels less than the level of stocks during the same period of the year the past.
Mofid Mandra, vice president of Austrian energy company LMF, believes that OPEC + has played a vital role in reducing the oil supply since the price collapse erupted into negative territory last April, and the group has succeeded since this date in reducing supply to about 2.1. One billion barrels, and American producers have contributed to reducing supply by 2.4 million barrels per day, less than last year, and inventories of crude oil and products have decreased by 5 percent since their peak in 2020.
He pointed out that the current rise in crude oil prices creates a very positive atmosphere in the market and encourages traders to withdraw oil stocks and put them on the market instead of continuing the process of building stocks in anticipation of speculative activities and reaping profits in subsequent price declines.
And Winnie Acello, an American analyst at African Engineering International, adds that the continuing high prices tempt American producers to resume heavy supplies, which is something that must be hedged to maintain market stability and balance, although most American producers have confirmed that they have abandoned the previous idea. , Namely, mass production at no cost and they are currently focusing on maintaining current production levels.
She indicated that American producers are currently focusing – according to most international reports – on reforming the balance sheets and treating the huge reductions in assets over the past two years, compensating shareholders by increasing the distribution of profits and getting rid of all the repercussions of the oil depression that occurred in 2020, after they had previously succeeded in reducing the break-even price. To $ 30 a barrel.
On the other hand, with regard to prices, oil prices rose slightly in the European market Thursday to resume its gains that were temporarily halted on Wednesday as part of corrections and profit-taking, approaching once again touching the highest level in 13 months, after a significant decline in commercial crude stocks in the United States, the largest consumer. Fuel in the world.
US crude rose about 0.2 percent, to $ 58.45, from the opening level at $ 58.35, and recorded the lowest level at $ 58.20, and Brent crude rose 0.2 per cent, to $ 61.22 a barrel, from the opening level at $ 61.10, and recorded the lowest level. At $ 60.97.
When settling on Wednesday, US crude lost less than 0.1 percent, in its first daily loss in the last eight days, due to corrections and profit-taking, after earlier in trading, it hit a 13-month high of $ 58.88 a barrel.
Brent crude futures fell 0.1 percent, in the first daily loss since January 29, after reaching $ 61.68 a barrel, the highest since January 2020.
Yesterday, the US Energy Agency announced a decrease in commercial stocks in the country by 6.6 million barrels during the week ending February 5, in the third consecutive weekly decline, exceeding market expectations for a decrease of 0.9 million barrels.
According to that data, the total commercial inventories in the United States decreased to about 469 million barrels, which is the lowest level since the week ending on March 27, 2020, in a positive sign for the levels of domestic demand in the largest fuel consumer in the world.
As for US production, it increased by about 100,000 barrels per day last week, bringing the total production to 11.0 million barrels per day, and the United States is currently the largest oil producer in the world.
On the other hand, the OPEC crude basket rose, recording $ 60.45 a barrel on Wednesday, compared to $ 60.28 a barrel the previous day.
The daily report of the Organization of Petroleum Exporting Countries (OPEC) said Thursday that the price of the basket, which includes the average prices of 13 crude produced by the member states of the Organization, has achieved its eighth consecutive increase, and that the basket gained about three dollars compared to the same day last week in which it recorded 57.72 dollars. Barrel.


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