Oil prices fell yesterday, after rising during sessions towards $ 73 a barrel, which was supported by a report that stated that Russia and Saudi Arabia are discussing cutting production next year.
Brent crude fell $ 1.18 to reach $ 71.81 a barrel. Crude hit $ 71.18 a barrel on Tuesday, its lowest level since August 16. While US crude fell 38 cents to reach $ 61.87 a barrel.
Referring to potential supply reduction talks, Olivier Jacob, an analyst at PetroMatrix, considered it as an attempt to return some speculations on rising prices to the market.
Yesterday, the US Energy Information Administration said that crude oil inventories in the United States rose last week, while gasoline stocks increased, and inventories of distillates declined.
Crude inventories rose by 5.8 million barrels last week, while analysts had forecast a 2.4 million-barrel increase.
The US Energy Information Administration said crude stocks at the delivery center in Cushing, Oklahoma rose 2.4 million barrels.
The administration's data showed that the consumption of crude oil refineries fell by 9,000 barrels per day. Refinery utilization rates increased by 0.6 percentage points.
Gasoline inventories rose 1.9 million barrels, while analysts' forecasts in a Reuters poll showed a 2.3-million-barrel decline.
Distillate stocks, including diesel and heating oil, fell by 3.5 million barrels, while 2.6 million barrels were expected to fall.
US crude oil imports rose last week by 275,000 bpd.
On the other hand, the British Petroleum International (BP) stated, "The world needs a lot of huge investments in oil and gas in the next few years, due to the natural depletion of existing fields, which ranges from 3 to 5 percent per year. And that new investments are needed to maintain production levels at the current level - at the very least - without falling or stopping."
According to a recent report by the British company that there are currently more than one billion people around the world do not have access to electricity.
The world's population is also expected to grow by about 2 billion by 2040, which is expected to drive further economic growth and raise energy demand.
Global energy consumption is expected to rise by about one-third by 2040, which is driven by population growth and booming economic growth, it said.
It noted that during the same period, the world needs to reduce carbon emissions by almost half in order to achieve the objectives of the Paris Agreement to combat climate change.
With current trends, emissions are expected to rise by 10 percent to 2040.
It noted that BP is launching this dual challenge to provide the energy needed to achieve human prosperity while reducing greenhouse gas emissions to meet the community's goals.
It pointed out that renewable energy sources such as wind and solar energy are the fastest growing form of energy in many years, It clearly plays an important role in helping us reduce emissions.
It stressed that non-renewable resources will still account for about 70 per cent of global energy consumption in 2040, with oil and gas accounting for more than 40 per cent.
The report noted the International Energy Agency's expectations that oil and gas will represent a larger share of the energy mix, which will exceed 50 percent in the coming years as carbon capture and storage activities are expanded and reused.
It pointed out that renewable energy alone will not be sufficient to meet the needs of demand, as the world needs to benefit from many different energy resources, primarily oil and gas.
The report predicted that the coming years will witness developments in the oil and gas industry. The emphasis will be placed on so-called "lucky barrels", which are the lowest cost and least risk of emissions after the expansion of carbon reduction technologies.
Despite the pressure from the Paris agreement to combat climate change, the world will need large amounts of oil and gas for decades to come, as there is no room for scaling back conventional energy projects, the report says.
Thorsten Andrebo, Honorary Secretary General of the International Gas Union, said to the Economist that the granting of exemptions to eight countries from the ban on the purchase of Iranian oil pushed prices towards further decline in light of the disappearance of supply concerns, especially that OPEC and its allies have already reached new record levels of supplies to meet the needs of consumers and calm the pace of prices, which reached record levels early last month.
He noted the importance of strengthening oil and gas investments in the coming period.
He considered this matter as very urgent to compensate for the depletion of fields and secure supply in the long term, especially as the investment faced one of the most difficult economic cycles that occurred with the sharp decline in prices during the summer of 2014, which led to a slowdown that has not fully recovered from the market so far.
Reinhold Gutierrez, head of the oil and gas sector at Siemens, said, "To give an opportunity to the countries to deal with Iranian oil until next May will be a good time to protect the market from shocks of production volatility and price instability."
He pointed out that this period may witness a sharp decline in the level of Iran's oil exports.
Gutierrez pointed out the intensive cooperation efforts between OPEC, led by Saudi Arabia, and the independents, led by Russia, to deal with the geopolitical factors that led to wide fluctuations in the market during the last period.
He noted that this cooperation will develop widely through the new agreement next month.
Andrew Morris, director of management consulting firm Brewery, said that the meeting of the Abu Dhabi Production Control Committee on Sunday will be a good opportunity to assess the market situation in the first meeting after the entry into force of the sanctions and the granting of exemptions to the eight countries.
He pointed out that the Ministerial Committee has a major role in the coming period to follow up and evaluate the rapid and successive developments in the market.
Morris said there has been steady progress in recording levels consistent with the cut production agreement, which is now approaching the target of 100 per cent, which in turn means pumping significant increases in the market both in OPEC production as a group or in Russia. This has finally made the organization talk about a possible new production cut to avoid a possible supply spurt next year 2019.
