*Osama Suleiman from Vienna
Oil analysts expected oil prices to continue their gains this week after gaining about 1.5 per cent at the end of last week due to improved demand indicators and concern about the level of supplies from Libya.
Prices receive the main support from production cuts implemented by OPEC in cooperation with independents from outside the organization, as well as the growing influence of US sanctions in Iran and Venezuela and expectations of a slowdown in US production supplies.
Analysts believe that prices also receive support from optimism about the near-agreement between the United States and China, which is ending the protracted trade disputes that have raised concerns about global growth over the past months.
Saudi Arabia's pledge to make every effort to rebalance the market, analysts say, strengthens confidence among traders and renews optimism in the OPEC + producer partnership and promises strong market performance during the second quarter.
Analysts believe that US production may not benefit much from the rise in prices because of the relative slowdown caused by the depletion of cheap production areas and high drilling costs, which is an increasing burden especially for SMEs.
Analysts expected that the next meeting of producers in June will be following the resolution of several hot files of the most important possibility of termination of the concessions granted to Iranian oil buyers with an accurate assessment of the scale of sanctions losses for the production of Venezuela and Iran, as well as Libyan production in the light of recent political tensions.
In this context, Ross Kennedy, managing director of QHA Energy Group, said to the Economist that oil prices performed well during the first quarter as many were betting on weak demand.
He pointed out that the gains are likely to continue during the current week and the second quarter in general.
Kennedy explained that the arrival of Brent crude to the level of $ 70 is a reflection of the effectiveness and strength of the plan of "OPEC +" to reduce oil supply in the markets and support the plan sanctions on Iran and Venezuela.
He said that the plan came at a precise timing at the beginning of the year and after a violent wave of price deflation at the end of last year because of the oversupply of supply.
For his part, Andrew Morris, director of management consulting firm Boerewors, said to the Economist that concerns about demand faltering were overstated, and demand levels remain strong and promising, particularly in emerging Asian economies in view of the imminent expectation of the resolution of trade disputes between China and the United States, which supports the expectations of global growth.
Morris pointed out that the rise in crude prices will lead to a rise in gasoline in the United States, which will create pressure on consumers, which prompts the US administration to ask producers to return to increase production to reduce prices.
He pointed out that "OPEC" does not look at prices with a vision of a short time and aware of the changing nature, and therefore, "OPEC" focused on the objectives of stability and balance in the sustainable market.
David Ledesma, an analyst at South-court Ltd, said to the Economist that many international banks such as Goldman Sachs expect prices to continue rising in the coming weeks due to lack of supply and strong demand that have the impact of extensive sanctions on producers and the possibility of disruptions in Libyan supplies due to political developments in the country.
Ledesma explained that higher prices are likely to revive the production of US shale oil again, but rock production is insufficient to meet the needs of consumers in light of the shortage of supply of heavy crude despite attempts by refiners of large consumer countries such as South Korea to test the deal with US light oil after the cessation of the purchase of Venezuelan and Iranian oil.
In turn, Nina Anigbogu, a Russian analyst and international arbitration expert, said to the Economist that the producers meeting in June will come as many market conditions have become clear, especially with regard to the American decision regarding the extension of concessions to US oil buyers or not.
Oil prices are likely to continue to gain, especially if trade disputes are fully resolved and concessions granted to Iranian oil buyers along with the possibility of interruptions, as well as the recovery of demand and adherence to OPEC's plan to reduce supply, which was a success in the first quarter of this year.
On the other hand, oil prices rose 1.5% at the end of last week with strong job data in the United States that fears of weakening global demand for crude eased and expectations that an escalation of the conflict in Libya could reduce oil supplies.
Prices have also been supported by growing optimism that Washington and Beijing are close to a trade deal.
According to "Reuters", Brent crude futures closed up 94 cents, or 1.35 percent, to settle at $ 70.34 a barrel.
Earlier in the session, Brent hit $ 70.46, the highest level since Nov. 12.
US benchmark WTI futures rose 98 cents, or 1.58 percent, to settle at $ 63.08 per barrel.
US crude was trading at $ 63.24, which is the highest level since November 6.
Brent hit a second straight week of gains, while US crude was the fifth consecutive weekly gain.
US energy companies boosted oil drilling for the first time in seven weeks after crude contracts jumped nearly 40 percent this year.
Baker Hughes Energy Services, in its closely monitored weekly report, stated, "The drilling companies added 15 oil pits in the week ending April 5, which is the largest increase since May that is bringing the total number of active excavators to 831."
In the previous week, the number of rigs dropped to the lowest level since April 2018 and the number of active oil drilling rigs in America, which is a preliminary indicator of future production that is higher than a year earlier when there were 808 excavators running.
US oil production continues to grow despite expectations that growth will slow.
According to data from the US Energy Information Administration, production hit an all-time high of 12.2 million bpd last week, up from the previous record of 12.1 million bpd in the past few weeks.
According to the Baker Hughes report, the total number of oil and natural gas rigs active in the United States this week are 1025, most of the excavators produce oil and gas.