Osama Suleiman from Vienna
Crude oil prices returned to record increases, due to optimism in the progress made in trade negotiations between the United States and China, and expectations that the agreement will have good repercussions on economic growth and global demand for crude oil.
Prices receive strong support from the agreement to cut production in light of deepening it with the beginning of next year by an additional 500,000 barrels per day and 400,000 voluntary barrels from Saudi Arabia and expectations to control excess supply and support stability in the market and reduce the pace of building oil stocks.
Oil specialists and analysts say, "The factors supporting the rise in prices and achieving more gains during the coming period are much stronger than the factors that pressure the prices that limit the gains."
They pointed out that oil prices recorded their highest levels in three months, influenced by four factors, represented in the excellent progress in containing trade disputes, in addition to the deeper production cuts implemented by the "OPEC +" coalition, and expectations of US production contraction, in particular, slowing supplies of shale oil, In addition to the emergence of indicators that confirm a state of clear stability in the performance of the global economy.
In this context, John Hall, Director of Alfa Energy International, told to "Al-Eqtisadiya" that there is a state of variation in market assessments, specifically the new production cuts and their ability to address the supply glut, especially since this abundance is not limited in size and can outweigh the new larger cuts, but top producers are ready to close a meeting in March to re-evaluate the market situation with the end of the first quarter of the year. "
He added that the "OPEC + Alliance of Producers is confident in the ability of the agreement after its amendment to restore much of the state of the imbalance in the market and narrow the gap between supply and demand." This does not mean a completely negative attitude towards reducing production, as the Energy Agency sees in deep cuts positive effects in the market, the most prominent of which is the switching of morale to positive
For this part, Damir Tsperat, director of business development at Technik Group International, told "Al-Eqtisadiya" that stopping the escalation in the trade war is a good news and supportive to the crude oil market, noting that there is a new state of flexibility in the positions of the United States and China with regard to reducing tariffs.
For this part, explained to the "Al-Eqtisadiya" Marcus Krug, senior analyst for "A Control" for oil and gas research, that the fears of the global economic recession in the next year are still remaining and not completely finished, despite the positive new sentiment supporting growth, especially in the major economies Countries, indicating that recent moves may succeed in protecting the global economy from a deeper recession.
He pointed out that the United States is keen that the trade war not slip into the trap of destroying global growth and its future prospects, so the new intervention came to create a positive atmosphere before the start of a new year that might witness an abundance of oil supplies and supplies from countries such as Brazil, Norway, and Guyana, while American production is struggling to overcome Several major difficulties are the number of excavators decreasing, the drilling activity slow and further spending cuts in the near future.
In turn, Nina Angebogo, a Russian analyst and economic arbitration specialist, pointed out that the Chinese economic data is still strong and supportive of the continuity of positive expectations for crude oil demand, especially with the start of important shifts towards containing the risks of escalation of trade disputes, pointing out that the meeting of producers in "OPEC" And outside in next March comes in the framework of intensive and continuous follow-up of market developments
She indicated to "Al-Eqtisadiah" that the hedge funds and money managers last week made the strongest shift to long-term bets on crude oil in two years, in a sign of a broad positive development in market sentiment and the widening circle of expectations for recording price rises, which reflects confidence in a dealing plan Producers with the market and confidence in the ability of the global economy to overcome the current pitfalls of growth by resolving trade disputes between the two largest economies in the world.
Brent crude futures rose 11 cents, or 0.2 percent, to $ 65.45 a barrel by 07:37 GMT, while West Texas Intermediate U.S. crude rose nine cents, or 0.2 percent, to $ 60.30 a barrel.
Under a partial trade agreement announced last week, Washington will cut part of the import tariffs from China in exchange for Chinese purchases of agricultural, manufactured and energy products that increase by nearly $ 200 billion over the next two years.
Larry Kodlo, a great adviser to the White House yesterday, said "What is called the" phase one "of the trade agreement was completed entirely," adding that "the United States exports to China will double under the agreement."
The agreement was not signed yet, as a number of Chinese officials said, according to "Reuters", "The drafting of the agreement remains a critical issue and requires accuracy to ensure that the expressions used in the text do not lead to an escalation of tensions again and deepening differences."
On the other hand, the OPEC crude basket rose and recorded its price by $ 67.22 a barrel, last Monday, compared to $ 66.76 a barrel for trading on Friday.
The daily report of the Organization of Petroleum Exporting Countries (OPEC) said, "The price of the basket, which includes the average prices of 14 crudes from the production of member states in the organization, achieved its third consecutive rise, and the basket gained two dollars compared to the same day last week when it recorded 65.57 dollars. A barrel. "
