Oil prices reaching $ 100 are impossible for these reasons

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Al-Sabban: Libyan oil is coming in force, with no less than 1.5 million barrels per day

Previously, a number of questions were asked to Dr. Muhammad Al-Sabban, the international oil consultant, about whether oil prices would reach levels of one hundred dollars or higher for Brent crude, and whether the moment is ripe for us to see prices of $ 100 and above, and the factors of this optimism.

Al-Sabban explained that the return of oil prices to $ 100 and above is almost impossible in light of the global trend to dispense with oil, stressing that there is a dumping of optimism by consulting houses such as Goldman Sachs, Barclays and others, driven by factors such as the belief that the world will experience a wave of inflation. As a result of the “quantitative easing” packages adopted by many countries to gradually revive their economy after the Corona pandemic.

He added that some people have confused between temporary factors and those for the longest period. The rise occurring these days is mainly due to the disruption of some Texas oil production fields, as a result of the frost wave that passed through this US state. It is a temporary phenomenon, after which US production returns to its pre-crisis normal levels.

And by his question, has the OPEC + alliance really performed a historic performance in controlling the oil market? Al-Sabban replied that despite the excesses of some members of the coalition, we can say that it was an unexpected performance, adding to it the pioneering Saudi step in making an additional voluntary reduction of one million barrels per day for the current February and March.

And about what is the next step of the OPEC + alliance, what is the reaction to the rise in oil prices, and are there signs of a traditional Russian dispute? Al-Sabban emphasized that history always reminds us that with improved prices, the tendency for non-compliance is greater to take advantage of these price rises, and therefore there is ambiguity about what OPEC + will do, as a group or as individual measures, and the effect of this on the global supply of oil.

He pointed out that it is too early to say that there is a real recovery in global demand for oil, in light of the continued closures in most global economies, especially the main ones, and when will the real return to them and how to deal with the contraction of their economies, the uncertainties still exist, and the recovery of global demand for oil is a factor Chief in determining the recovery in oil prices and the extent to which it will reach I do not rule out the continuation of fluctuations in oil prices until next summer, and prices are at an average of $ 60 a barrel for Brent crude, and even if they rose in the short term to levels higher than “$ 70”, they soon return to lower levels.

With regard to optimism on the part of oil investors that prices will continue to rise by reaching one hundred dollars a barrel, Dr. Al-Sabban explained that a clear reading of the markets does not support this optimism, and some support his belief that oil prices have reached a hundred dollars and more on the premise that there is a lack and reluctance to invest in productive capacity. And they forgot that there are capacities in excess of four million barrels per day of Iranian and Venezuelan oil that are withheld by the sanctions from the market.

At the end of his speech to “Sabaq”, he stated that Libyan oil is coming with strength, at least one and a half million barrels per day, and that there is marginal production that will enter the market at high prices that exceed its marginal cost. Minister of its energy, when we got close to balance.

Oil prices

A specialist for “Previously”: Oil prices reaching $ 100 are impossible for these reasons

Previously

Previously, a number of questions were asked to Dr. Muhammad Al-Sabban, the international oil consultant, about whether oil prices would reach levels of one hundred dollars or higher for Brent crude, and whether the moment is ripe for us to see prices of $ 100 and above, and the factors of this optimism.

Al-Sabban explained that the return of oil prices to $ 100 and above is almost impossible in light of the global trend to dispense with oil, stressing that there is a dumping of optimism by consulting houses such as Goldman Sachs, Barclays and others, driven by factors such as the belief that the world will experience a wave of inflation. As a result of the “quantitative easing” packages adopted by many countries to gradually revive their economy after the Corona pandemic.

He added that some people have confused between temporary factors and those for the longest period. The rise occurring these days is mainly due to the disruption of some Texas oil production fields, as a result of the frost wave that passed through this US state. It is a temporary phenomenon, after which US production returns to its pre-crisis normal levels.

And by his question, has the OPEC + alliance really performed a historic performance in controlling the oil market? Al-Sabban replied that despite the excesses of some members of the coalition, we can say that it was an unexpected performance, adding to it the pioneering Saudi step in making an additional voluntary reduction of one million barrels per day for the current February and March.

And about what is the next step of the OPEC + alliance, what is the reaction to the rise in oil prices, and are there signs of a traditional Russian dispute? Al-Sabban emphasized that history always reminds us that with improved prices, the tendency for non-compliance is greater to take advantage of these price rises, and therefore there is ambiguity about what OPEC + will do, as a group or as individual measures, and the effect of this on the global supply of oil.

He pointed out that it is too early to say that there is a real recovery in global demand for oil, in light of the continued closures in most global economies, especially the main ones, and when will the real return to them and how to deal with the contraction of their economies, the uncertainties still exist, and the recovery of global demand for oil is a factor Chief in determining the recovery in oil prices and the extent to which it will reach I do not rule out the continuation of fluctuations in oil prices until next summer, and prices are at an average of $ 60 a barrel for Brent crude, and even if they rose in the short term to levels higher than “$ 70”, they soon return to lower levels.

With regard to optimism on the part of oil investors that prices will continue to rise by reaching one hundred dollars a barrel, Dr. Al-Sabban explained that a clear reading of the markets does not support this optimism, and some support his belief that oil prices have reached a hundred dollars and more on the premise that there is a lack and reluctance to invest in productive capacity. And they forgot that there are capacities in excess of four million barrels per day of Iranian and Venezuelan oil that are withheld by the sanctions from the market.

At the end of his speech to “Sabaq”, he stated that Libyan oil is coming with strength, at least one and a half million barrels per day, and that there is marginal production that will enter the market at high prices that exceed its marginal cost. Minister of its energy, when we got close to balance.

February 27, 2021 – Rajab 15, 1442

01:52 AM


Al-Sabban: Libyan oil is coming in force, with no less than 1.5 million barrels per day

Previously, a number of questions were asked to Dr. Muhammad Al-Sabban, the international oil consultant, about whether oil prices would reach levels of one hundred dollars or higher for Brent crude, and whether the moment is ripe for us to see prices of $ 100 and above, and the factors of this optimism.

Al-Sabban explained that the return of oil prices to $ 100 and above is almost impossible in light of the global trend to dispense with oil, stressing that there is a dumping of optimism by consulting houses such as Goldman Sachs, Barclays and others, driven by factors such as the belief that the world will experience a wave of inflation. As a result of the “quantitative easing” packages adopted by many countries to gradually revive their economy after the Corona pandemic.

He added that some people have confused between temporary factors and those for the longest period. The rise occurring these days is mainly due to the disruption of some Texas oil production fields, as a result of the frost wave that passed through this US state. It is a temporary phenomenon, after which US production returns to its pre-crisis normal levels.

And by his question, has the OPEC + alliance really performed a historic performance in controlling the oil market? Al-Sabban replied that despite the excesses of some members of the coalition, we can say that it was an unexpected performance, adding to it the pioneering Saudi step in making an additional voluntary reduction of one million barrels per day for the current February and March.

And about what is the next step of the OPEC + alliance, what is the reaction to the rise in oil prices, and are there signs of a traditional Russian dispute? Al-Sabban emphasized that history always reminds us that with improved prices, the tendency for non-compliance is greater to take advantage of these price rises, and therefore there is ambiguity about what OPEC + will do, as a group or as individual measures, and the effect of this on the global supply of oil.

He pointed out that it is too early to say that there is a real recovery in global demand for oil, in light of the continued closures in most global economies, especially the main ones, and when will the real return to them and how to deal with the contraction of their economies, the uncertainties still exist, and the recovery of global demand for oil is a factor Chief in determining the recovery in oil prices and the extent to which it will reach I do not rule out the continuation of fluctuations in oil prices until next summer, and prices are at an average of $ 60 a barrel for Brent crude, and even if they rose in the short term to levels higher than “$ 70”, they soon return to lower levels.

With regard to optimism on the part of oil investors that prices will continue to rise by reaching one hundred dollars a barrel, Dr. Al-Sabban explained that a clear reading of the markets does not support this optimism, and some support his belief that oil prices have reached a hundred dollars and more on the premise that there is a lack and reluctance to invest in productive capacity. And they forgot that there are capacities in excess of four million barrels per day of Iranian and Venezuelan oil that are withheld by the sanctions from the market.

At the end of his speech to “Sabaq”, he stated that Libyan oil is coming with strength, at least one and a half million barrels per day, and that there is marginal production that will enter the market at high prices that exceed its marginal cost. Minister of its energy, when we got close to balance.





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