The rise in US inventories puts pressure on oil prices … Fears of a faltering demand for fuel


Crude oil prices continued their decline under pressure from the unexpected increase in US oil stockpile levels, in addition to the return of the very high level of infections in India and Japan with the Corona virus, which led to renewed concerns about the difficulty of recovering global demand and the return of the accelerating pace of global economic growth.
The price declines resisted the efforts of the “OPEC +” coalition to control the oil supply, as it achieved a matching rate and compliance with the production cuts last March amounted to 113 percent, while the energy ministers in the group are preparing for a new hypothetical monthly meeting next Wednesday to discuss market fundamentals and mechanisms to implement gradual increases starting From next month, which will add about two million barrels per day to the global supply by next July to meet the needs of high summer consumption.
Experts and oil analysts told Al-Eqtisadiah that the market’s eyes are directed towards a new meeting of energy ministers in the OPEC + group next Wednesday, which is likely to be satisfied with assessing the status and fundamentals of the current oil markets instead of adjusting production targets, as the market seems to be making good steps towards The balance after announcing increases gradually over the summer months.
The specialists noted that the Russian Deputy Prime Minister Alexander Novak confirmed that the producers are satisfied with their production plans for the next three months, and that the next meeting aims to review developments and assess the current situation.
The specialists pointed out that the escalating tension in US-Russian relations and the imposition of new sanctions on Moscow on April 15th may have strong effects on the stability of the oil market despite the sanctions not targeting the oil sector, pointing out that the Russian government is now feeling more interest in working in a way. Building with Saudi Arabia to support oil prices, especially in the short term and prevent an additional decline in the value of the currency, noting that broader restrictions on oil investments in upstream projects are unlikely unless relations deteriorate further between the two countries.
In this context, Dr. Philippe Debisch, head of the European Energy Initiative, says that prices are still in the phase of successive fluctuations and doubts surrounding the recovery in light of the renewed injuries in pivotal countries in the global demand system, but in the longer term, most producers are convinced of a gradual recovery of demand, especially on Fuel, which prompted the “OPEC +” group to announce its decision to gradually increase production by more than two million barrels of crude oil per day between May and July, in light of the expected recovery from the impact of the epidemic.
He pointed out that the increases are primarily aimed at meeting the needs of high domestic consumption in the summer months, as the increase includes a gradual return of one million barrels per day of Saudi crude, which it voluntarily lowered earlier this year as part of the efforts of the largest producer in OPEC to achieve balance. In the market.
For his part, Moufid Mandra, Vice President of the Austrian LMF Energy Company, says that despite the instability of the market and the fragility of the global economy, most of the parties concerned with the energy sector are convinced that the global oil market is already entering the early stages of recovery from the epidemic. .
He pointed out that the “OPEC +” group has abundant production capabilities and reserves, and in the case of strong growth in demand, it can provide the necessary crude oil quickly and in the short term, while the problem of high production costs and financing difficulties limits the ability of US production to respond quickly to price growth, as it was. It occurs in earlier periods, especially after the outbreak of the so-called tight oil revolution.
According to Matthew Johnson, an analyst at the International Consulting Company, Oxyra, that crude oil prices are currently under the influence of severe pressures due to new casualties and stockpile inflation, but the picture will soon change, as oil prices are likely to turn up again once the market gets rid of the tension Associated with the acceleration of infections finally with the Corona virus.
He noted that many international investment banks provided positive visions for the situation of the oil market in the second half of this year, indicating that estimates issued by the agency “Platts” suggest that oil prices will rise above $ 70 a barrel around the middle of the year, as the basics of supply and demand lead. The improved starting from May to a large withdrawal of surplus oil stocks until next August.
In turn, Winnie Acello, an American analyst at the international “African Engineering” company, says that while consuming countries press for an increase in supplies, we find that the “OPEC +” group is very cautious and keen not to abandon compliance with the agreement to reduce production, which reached 113 percent last March. Which makes oil prices stabilize around current levels around $ 60 a barrel.
She noted estimates issued by the International Energy Agency confirming that sustainable oil prices, in excess of $ 60 a barrel, may allow oil companies to honor the pledges they made in their latest strategies for investors to maintain discipline and efficiency of capital, return profits to investors and reduce corporate debt, and at the same time. Increase their investments, indicating that the economic recession may cause crude oil production not to reach peak levels in 2019.
On the other hand, with regard to prices, oil prices continued their losses for the third session, Thursday, April 22nd, as a sudden increase in US crude stocks and a new upsurge in COVID-19 cases in India and Japan fueled concerns about the global economic recovery, and that demand for fuel may be fueled. Stumble.
By 05:27 GMT, Brent crude futures were down 20 cents, or 0.3 percent, to $ 65.12 a barrel, after dropping $ 1.25 on Wednesday.
West Texas Intermediate crude futures fell 21 cents, or 0.3 per cent, to $ 61.14 a barrel, after losing $ 1.32 yesterday, and the two contracts fell more than 2 per cent, on Wednesday, to close at their lowest levels since April 13 ( April), which are down about 3 percent, since the beginning of this week.
The US Energy Information Administration said yesterday that crude oil inventories in the United States increased in the week ending April 16, as inventories increased by 594 thousand barrels per day, compared to analysts’ expectations in a Reuters poll for a decrease of 3 million barrels.
On the other hand, the “OPEC” basket of crude fell, and its price reached 64.02 dollars a barrel on Wednesday, compared to 65.36 dollars 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 average prices of 13 crude produced by the member states of the Organization, achieved the first decline after a previous rise, and that the basket gained about one dollar, compared to the same day last week, in which it was recorded $ 63.39 a barrel.


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