Oil analysts expected the continued rise in crude oil prices this week, after oil ended last week with gains of about 3 percent due to the relative decline of the dollar after hitting its highest level in 20 years, as the strong US currency is usually bearish for oil prices, along with concerns about the scarcity of oil. Supplies in light of the escalation of Western-Russian disputes over sanctions and the Russian oil embargo.
Analysts pointed out that, on the other hand, crude oil prices are facing downward pressures due to fears of tightening monetary policies by central banks, high rates of inflation and stagnation, in addition to the rise in US crude oil inventories by 8.85 million barrels to 427 million, while they are still only about 3 percent lower. It is normal for this time of year, at a time when the demand for gasoline in the United States fell 7.9 per cent compared to last year.
They highlighted a partial attempt to help Britain’s energy crisis, as new Prime Minister Lisa Trauss wants to lift a ban on hydraulic fracturing as part of her proposed plan to shore up energy supplies.
They pointed to the recovery of oil from the lowest level in eight months, with the market ignoring an American report showing the inflation of crude oil stocks and the decline in demand after the exacerbation of the recent selling, and the monetary tightening and concerns about the economic slowdown affected the market, while the Energy Information Administration raised its forecast for global oil demand in the week. The past also lowered the forecast for US supplies.
In this context, Ross Kennedy, managing director of QHA Energy Services, says, “The market is expected to recover this week in anticipation of overcoming the deterioration in demand in China due to the closures.” He also suggested that market sentiment would improve and fears would fade away. from a shortage of global oil supplies.
He pointed out that the end of the summer driving season will make the demand for diesel and heating oil the main engine to support oil prices, especially in light of data that distillate stocks are very low as we approach the winter season less than 60 days ago.
For his part, Damir Tesperat, director of business development at the international company “Technic Group”, believes that crude oil prices are heading for more recovery this week – most likely – as the shortage in the shares of “OPEC +” producers has reached a record level, according to data issued by… Platts Agency, despite a relative increase in production, as “OPEC +” production rose by 260 thousand barrels per day last August.
He pointed out that there were declines in the production of Kazakhstan and Nigeria, while the production of both Libya and the Gulf states grew, and that the increasing shortages raise questions about how much crude oil the group will be able to add in a narrow market facing increasing sanctions on Russia due to the war in Ukraine. .
As for Peter Bachter, an economic analyst and specialist in legal affairs for energy, he believes that fluctuations are still dominant in crude oil prices, “as we found that daily transactions ended with a strong rise of about 4 percent at the end of last week, while weekly losses continued, but at a slower pace compared to previous weeks.”
He pointed out that many countries of the “OPEC +” alliance are facing limitations of production decline due to technical problems, lack of investment or internal turmoil.
And Irvi Nahar, a specialist in oil and gas affairs at the international company “African Leadership”, explains that the chances of achieving a rise in prices again are more likely, especially in light of the escalation of the Russian oil supply crisis to Europe in light of a ban that will be implemented by the end of this year, and the “OPEC +” alliance made a reduction. It will supply about 100,000 barrels per day next October, in anticipation of fears of a global slowdown and recession.
She pointed to Libya, which suffered extensive conflicts, and recorded the largest production gains in a month, as the state-owned National Oil Corporation quickly restored production in many major fields under its new management, while on the other hand, there were wide declines in some producers such as Nigeria, which Angola is now surpassing as the largest producer. In Africa, it continued its sharp decline by 130 thousand barrels per day last August.
On the other hand, with regard to prices at the end of last week, oil prices rose upon settling transactions on Friday, the ninth of September, amid the decline in the performance of the dollar and concerns related to the lack of supply of crude, but it recorded marginal weekly losses for the second week in a row.
Upon settlement of Friday’s trading, US crude futures rose by 3.89 percent to $86.79 a barrel, recording weekly losses of about 0.1 percent, and Brent crude futures rose by 4.1 percent to $92.84 a barrel, but recorded weekly losses of 0.2 percent. .
Russian President Vladimir Putin warned this week to suspend oil and gas exports to Europe in the event of a price ceiling being imposed, while the OPEC group decided to reduce oil production by one hundred thousand barrels per day in return for the increase approved during the last meeting.
“The West will have to face the risks of losing Russian energy supplies and rising oil prices in the coming months,” said Stephen Brennock of PVM, according to Archyde.com.
On the other hand, the US Baker Hughes report stated that the total number of active drilling rigs in the United States decreased by one rig this week, as the total number of rigs decreased to 759 this week – 256 rigs higher than the number of rigs this time in 2021.
He pointed out that oil rigs in the United States decreased by five this week, to 591, while gas rigs rose by four, to reach 166, while the various rigs remained unchanged at two.
The report noted that the number of rigs in the Permian fell by two to 340 this week, while rigs in Eagle Ford remained unchanged at 71 and oil and gas rigs in the Permian: 86 higher than it was this time last year.
He confirmed that crude oil production in the United States remained unchanged for the week ending September 2, while American crude oil production remained at 12.1 million barrels per day for the second week in a row, according to the latest weekly Energy Information Administration estimates, and production levels in the United States increased by 400,000 barrels. per day on an annual basis, an increase of 2.1 million barrels per day compared to last year.
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