Oil prices maneuver in a limited range … the pandemic restrictions in Asia undermine market sentiment

Crude oil prices began the week’s trading with a limited decline, as concerns about US supplies receded after the recovery of the main “Colonial” pipeline, in addition to continuing concerns about Asian demand due to casualties in India, in addition to the imposition of new restrictions in many Asian countries.
However, prices are receiving support from the opening of the economies of most European Union countries this week, in addition to the recovery of US demand due to the spread of vaccines and the resurgence of travel and aviation traffic again, in addition to the continued restrictions of the “OPEC +” group on the global oil supply.
He told Al-Eqtisadiah, oil analysts, “that sentiment appears weak in the market this week as a result of pressure from tepid demand amid the strong resurgence of Coronavirus cases in Asia, as governments in Southeast Asia re-impose restrictions on movement, but strong interest in buying.” Coupled with hopes of a recovery in demand in Europe will help boost morale. “
In this context, Robert Stehrer, Director of the Vienna International Institute for Economic Studies, says, “The crude oil prices started the week on a state of volatility and a tendency to decline as a result of the epidemic crisis in Asia, where the aviation fuel sector is also facing headwinds due to high casualties, which leads to suppressing the appetite of consumption. Fuel in general and jet fuel in particular. “
He pointed out that India, in particular, is suffering more from the decline in demand for jet fuel, amid the increasing number of casualties in the country, as the demand for jet fuel fell from its highest level in 12 months last March, down about 13.89 percent, in the month.
According to Rudolf Huber, an energy researcher and director of a specialized website, many of the largest oil-producing countries in the world have recently already put in place general plans to increase their production capacity in anticipation of international reports talking about peak oil demand, in addition to expectations of increased international pressure due to climate policies.
He pointed out that all producing countries want to make the most of their oil resources, and this trend may appear more strongly outside of “OPEC”, specifically in Russia, where officials in the energy sector talked about the importance of accelerating the pace of production as long as demand recovers and as long as its prospects are reassuring, pointing to Russia is pumping about $ 110 billion currently into developing its new oil reserves, especially in eastern Siberia.
“Global demand for crude oil is recovering strongly in Europe and the United States, despite the current crisis in Asia, and there are promising future prospects despite some skepticism about it. For example, OPEC confirms that the peak The demand for crude oil is invisible, while the Norwegian company Equinor expects peak demand for oil between 2027 or 2028, but the International Energy Agency suggests that the peak demand is after 2030. “
He noted that the crisis in India and the countries of Southeast Asia has severely affected market sentiment this week, especially if we realize that India imports 80 percent of its crude oil consumption and is striving to keep prices low and therefore faces a double crisis now due to weak demand and high prices.
In turn, Nayla Hengstler, Director of the Middle East Department in the Austrian Federal Chamber, says, “The US sanctions file on Venezuela and Iran may see progress in the coming period, which affects the two countries’ crude oil production and thus the global supply, “referring to the proposal of the Venezuelan interim president, Guaido the Confessor. By the United States finally, a gradual easing of sanctions to stimulate the country to restore stability, while negotiations are still continuing in Vienna on the Iranian nuclear program, amid expectations of the possibility of soon progress.
She pointed out that the situation in Venezuela is more dire due to the pressures of the economic crisis, as Venezuela’s oil production has decreased to 500 thousand barrels per day, or nearly a fifth of what it was five years ago, in addition to the severe decline in the rapidly deteriorating energy infrastructure, noting that the volume of investment What is required to renew the energy backbone amounts to $ 58 billion to repair oil fields and restore Venezuela’s production to about three million barrels per day, according to international company reports.
On the other hand, oil prices moved within a limited range yesterday, after concerns about supplies receded to support the recovery of a major US pipeline network, but the imposition of new restrictions in Asia amid the escalation of the number of Covid-19 infections affected the sentiment.
The gasoline shortage that hit the eastern coast of the United States slowly subsided on Sunday, as 1,000 more stations received supplies as the 8,900-kilometer Colonial Pipeline system recovered from a cyberattack that left it in a state of paralysis.
Brent crude futures rose three cents to $ 68.74 a barrel in Asian trading, and West Texas Intermediate crude rose eight cents, or 0.1 percent, to $ 65.45.
Both contracts jumped about 2.5 percent on Friday and snapped a slight weekly gain last week, for the third consecutive weekly increase.
“The market does not have a clear direction, but a new wave of restrictions to contain the pandemic in Asia is undermining market sentiment,” said Satoru Yoshida, a commodity analyst at Rakuten Securities.
Investors were in a state of caution due to fears that a fast-spreading strain of the Corona virus, first discovered in India, is spreading to other countries. Some Indian states said yesterday, “They will extend lockdown measures linked to Covid-19 to help contain the pandemic that has killed more than 270,000 people in the country.”
Singapore on Sunday warned that the new Corona virus strains are affecting more children, as the country prepares to close most schools starting this week, while Japan declared a state of emergency in three other provinces severely affected by the pandemic.
On the other hand, the OPEC crude basket retreated, recording $ 66.16 a barrel on Friday, compared to $ 66.78 a barrel the previous day.
The daily report of the Organization of the Petroleum Exporting Countries said yesterday, “The price of the basket, which includes the average prices of 13 crude produced by the member states of the Organization, achieved its second consecutive decline, and that the basket lost a few cents compared to the same day last week, in which it recorded 66.57 dollars.” Barrel. ”

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