Oil analysts affirmed that Saudi Arabia’s additional and voluntary production cuts of 400,000 barrels will enhance the recovery of oil prices, expecting continued price gains for crude during the current week, after last week’s transactions closed on the rise of about 1 percent and weekly gains of about 3 percent, at the time In which markets are awaiting the announcement of production cuts to enhance transparency, amid expectations of controlling the expected supply availability in the first quarter of next year.
And received prices substantial support from the decision of producers 'OPEC' "during the last ministerial meeting to deepen production cuts of around 500 thousand barrels per day from next month to reach the size of the cut applied to 1.7 million barrels per day and rising to 2.1 million barrels per day after the addition of 400 thousand barrels of voluntary reductions by Saudi Arabia.
Analysts expect that the level of new production cuts will be very supportive of the market and the recovery of oil prices, especially as it will be applied throughout the first quarter of next year, which usually witnesses a relatively slowing in demand due to the maintenance season of refineries in the United States, and that an early ministerial meeting for producers the end of the first quarter reflects the volume of close monitoring of market developments and the continuous evaluation of the oil supply reduction plan.
In this regard, Ross Kennedy, Managing Director of QHI International Energy Services, explained to "Al-Eqtisadiah" that Saudi Arabia plays a pivotal role and is leading producers cooperation towards a new reduction that accelerates the restoration of stability and balance in the market, pointing out that Saudi Arabia’s implementation of voluntary and additional cuts About 400,000 barrels per day supports price recovery, and adds more effectiveness to the new agreement to cut production, which comes in difficult market conditions amid heightened uncertainties about the growth of the global economy.
Another part, Alexander Pujel, an analyst at GBC Energy, the international, told to the "Al-Eqtisadiah" that The prices have already started a new process of gains at the end of last week, with the confirmation of the next step for the OPEC + producers alliance, and will continue to achieving satisfactory heights that producers are looking forward to this week, "noting that" OPEC "will focus during the coming period until the next March meeting on activating the process of controlling production quotas.
Another part, Peter Bacher, an analyst and expert in energy legal affairs, believes that the plan to reduce the supply will achieve a lot of success during the next year and push prices towards growth, "especially if we take into account several factors, including the continuous voluntary reduction of Saudi Arabia, which made the Kingdom's average production of 9.8 million A barrel per day so far this year, and there are also sharp declines in the production of both Iran and Venezuela due to the sanctions and Libya due to political turmoil, as other countries such as Angola, Azerbaijan and Mexico will not be able to maintain their production.
In turn, tells to "Al-Eqtisadiah", Arfi Nahar, an oil and gas affairs specialist at African Leadership International, that the new deal has created a better moral environment for the market and will enable it to overcome the effects of faltering trade negotiations, while progress in trade negotiations will push prices Oil, and broadly supports the efforts of the OPEC coalition.
Arfi expected Russia to achieve good compliance in the next three months, partly due to its desire to strengthen cooperation and partnership with OPEC, and because of OPEC’s response to it by excluding very light oil called condensate from Moscow’s share, as it sees production of those hydrocarbons that are Their extraction from natural gas fields was the only reason behind poor compliance with the production cut plan.
And oil prices ended last week on big gains, and Brent crude rose more than 1 percent, after the recovery in sentiment in the market due to the announcement of deepening production cuts.
According to "Reuters," Brent crude contracts ended the trading session, up 1.6 percent to 64.38 dollars a barrel, ending the week on gains of 3 percent.
It stepped up crude contracts for US measuring West Texas Intermediate 1.3 per cent, to close at $ 59.20 a barrel, posting gains of 7 per cent over the week, the largest weekly increase since June after the US Energy Administration data showed that crude stocks in the United States landed time The first in six weeks.
On the other hand, American energy companies reduced the number of oil drilling rigs operating for a seventh week in a row, with independent producers reducing spending on new drilling operations, although a series of year-long declines in the number of rigs did not prevent oil production in the United States from setting new records.
According to Baker Hughes Energy Services Company, in its weekly report, which has a follow-up document, the drilling companies turned off the five oil rigs last week, the total number of rigs to drop to 663, the lowest level since April 2017.
In the same week a year ago, there were 877 oil rigs operating in the United States, and the number of oil rigs is heading to record the first year of decline since 2016.
But the decline for the current year, which amounted to 222 so far, is much lower than the drop recorded in 2015, which amounted to 963 diggers, according to data "Baker Hughes" dating back to 1987.
The number of active oil rigs, a preliminary indicator of future production, fell to 12 consecutive months, a record, as independent exploration and production companies cut spending on new drilling operations, while shareholders sought to improve returns in a low energy price environment. Despite declines in the number of active rigs, the US oil production is expected to rise to 12.9 million barrels per day in 2019 to 13.29 million barrels per day in 2020 from a record high of 11 million barrels per day in 2018.