Crude oil prices returned to rise after a relative easing of the restrictions related to the Corona pandemic in China, despite the rise of the dollar and its highest levels in two years, which puts downward pressure on crude prices.
Compensating prices for some of its previous sharp losses revives hopes of a recovery in demand in China, which is one of the largest oil consuming countries in the world, at a time when producers in “OPEC +” continue their plan to gradually increase production by about 400,000 barrels per day on a monthly basis, despite Difficulties include lack of investment and the failure of some producers to meet the required quotas.
Oil analysts told Al-Eqtisadiah, “Fears of tight supplies and a lack of oil supply continue despite the announcement by the United States and other countries in the International Energy Agency that the huge release of strategic oil reserves amounting to 240 million barrels,” noting that the concerns are mainly related to the Russian war against Russia. Ukraine, which throws its weight on the market, because Russia is one of the largest producers of crude oil in the world.
And they highlighted the importance of the statements of OPEC Secretary-General Muhammad Barkindo, in which he stressed that the current crisis in the global oil markets caused by the war is beyond the organization’s control, noting that the losses of Russian oil supplies caused by current and future sanctions or customer boycotts may exceed seven million barrels. Daily.
In this context, Sven Schimmel, director of the German “VG Industry”, said, “The fluctuations in the oil market continue despite the fact that oil prices have largely abandoned their strong premiums since the beginning of the war,” noting that prices are still much higher than they were at the beginning of the year. due to the repercussions of the war.
He pointed to the difficulty of achieving balance in the market, in light of the current crisis and the sanctions associated with it, which was confirmed by “OPEC +” that there is no product capable of compensating the huge Russian production of oil and gas, pointing to the difficulty of “OPEC” responding to the call of the European Union and the rest of the consuming countries to Exploiting the current surplus production capacity to help in the crisis.
For his part, Robin Noble, director of Occera International Consulting, stated that “OPEC +” has been clear with all those concerned with the industry since the beginning of the crisis, as it stressed that market fundamentals are good, but price booms and instability are due to geopolitical risks alone.
He pointed out that sharp price jumps have now declined, with many refineries avoiding buying Russian supplies, following the imposition of US sanctions, and the European Union considering adopting similar sanctions, despite the difficulty of implementing this in practice in the energy sector.
He pointed out that the rise in energy prices – especially fuel – increased inflationary pressures and exacerbated the cost-of-living crisis that hits many consumers, noting the “OPEC” assertion that it cannot bridge the gap left by Russia, as producers in “OPEC” are keen on the cohesion and continuity of the producer alliance. In “OPEC +” led by Saudi Arabia and Russia.
Markus Krug, senior analyst at A-Control, a company for oil and gas research, added, “Crude oil prices may continue to fluctuate depending on the developments in the epidemiological situation in China, as the tight closure in China raised widespread concerns about demand, and then the easing of restrictions contributed to offsetting some losses. .
He pointed out that the rise in cases of infection in China in the past days led to the disruption of port operations, and prompted some refineries to reduce crude oil processing rates, explaining that despite the continuous talk about sanctions against Russia, there is still no indication that Russian crude exports will shrink. . Gulmira Raziva, Senior Analyst of the Strategic Energy Center in Azerbaijan, believes that the announcement of the huge and historic release of strategic oil reserves in the United States and the International Energy Agency contributed a lot to alleviating supply concerns in the market, and thus calming the pace of price appreciation.
She pointed out that Muhammad Barkindo, Secretary-General of the Organization of the Petroleum Exporting Countries, confronted the market with the reality of the organization’s vision of the current market developments, and also removed confusion about the next steps to address the current crisis, as he stressed that it would be impossible to completely replace the Russian barrels.
On the other hand, with regard to prices, the standard US crude oil for May delivery rose 6.31 dollars to 100.60 dollars a barrel. Brent crude for June delivery also rose 6.16 dollars to 104.64 dollars a barrel. Oil prices were supported by a decline in concerns about demand in China after Shanghai eased some restrictions related to the spread of the Covid-19 disease, and with Russia’s production of oil and gas condensate falling to the lowest level since 2020, while “OPEC” warned that it would be impossible to increase production, including Enough to make up for Russia’s supply loss.
According to “Archyde.com”, Shanghai said that more than seven thousand residential areas were considered low-risk, as no new infections were recorded in them for 14 days, and the neighborhoods decided which of them to lift restrictions.
On the other hand, the “OPEC” crude basket declined, and its price reached $100.08 a barrel, on Monday, compared to $101.06 a barrel the previous day.
The daily report of the Organization of Petroleum Exporting Countries (OPEC), Tuesday, said, “The price of the basket, which includes average prices of 13 crudes from the production of member countries of the Organization, achieved the first decline after a previous rise, and that the basket lost about six dollars compared to the same day last week, which It recorded $106.62 per barrel.