The report pointed to the stumbling of many new oil projects and the reduction of drilling activities, especially in the United States, which most of the rock companies cannot cope with the current level of prices at the mid-thirties of dollars, while the cost of production in some of them reaches about $ 50 a barrel or more, explaining Indeed, before the recent Corona crisis, American companies were suffering from difficulties in financing, especially for small producers, which led to an observed slowdown in growth, compared to other previous years in which the “rocky” record reached record levels, especially from the prime field.
Oil prices concluded last week on the worst weekly performance since the global financial crisis in 2008 affected by the outbreak of the Coronavirus, amid fears of slowing demand and expectations of a record increase in supply.
The rare mix of supply and demand shocks has caused the crude market to collapse as producers around the world prepare for an unexpected oil glut in the coming weeks.
Prices rose in transactions last Friday, recovered after the United States and other countries announced plans to support the weakening economies, but Brent crude fell 25 percent over the week, in its biggest weekly loss since the global financial crisis in 2008.
According to "Reuters", "Brent" rose 63 cents, to settle the settlement price at 33.85 dollars a barrel, while West Texas rose 23 cents to close at 31.73 dollars a barrel, and US crude futures fell about 23 percent over the week, which is the largest Her loss in percentage since 2008.
Oil and stock markets drew some support from hopes of a US stimulus package that could ease the economic shock caused by the Coronavirus.
"There is hope that all of this stimulus will bring stability to the economy, relieve some of the concerns about weak demand and keep parts of the economy strong enough to support oil prices," said Phil Flynn, an analyst at Price Futures Group in Chicago.
American energy companies raised the number of oil rigs operating for the fourth week in five weeks, although Exxon Mobil said it would join other producers and reduce drilling operations this year.
Baker Hughes Energy Services reported in its closely watched report that energy companies added four oil rigs last week, bringing the total number of operating rigs to 682, the highest level since December.
This represents a decline of 18 percent, compared to the same week a year ago, when the number of operating rigs was 834.
Exxon, which analysts say occupies most of the US oil rigs, has said it will cut about 20 percent of the 58 rigs it operates in the Permian Basin this year, and the Permian Basin in West Texas and eastern New Mexico is the country's largest oil shale.
In 2019, the number of oil rigs, an early indicator of future production, fell by an average of 208 rigs, after rising by 138 in 2018 as independent exploration and production companies cut spending on new drilling as shareholders sought better financial returns, in light of the situation Energy prices fall.
A Reuters survey concluded that oil prices tend to lie near current low levels in the coming months, as a faltering agreement by producers to limit production harms an already reeling market due to falling demand caused by the Coronavirus.
Analysts in the quick opinion poll reduced their expectations for Brent crude prices, to $ 42 a barrel on average this year, compared to an average of $ 60.63 a month in the February referendum.
It is expected that the average price of global benchmark crude will reach about $ 34.87 in the second quarter and $ 39.05 in the third quarter before recovering some strength and reaching $ 44.08 in the fourth quarter of the year.