• Goldman Sachs: Access to $ 75 per barrel of oil is easy




    *Osama Suleiman from Vienna and «AlEqtisadiah» from Riyadh


    Yesterday, Goldman Sachs showed optimistic outlook for oil prices in the near term, as supply continues to be severely curtailed by production cuts by producers in the Organization of Petroleum Exporting Countries (OPEC) and Russia.

    According to Reuters, the US bank said in a research note that the chances of rising prices of global measurement "Brent" is exceeding the near-term outlook of $ 67.5 per barrel and it could easily trade at $ 70 to $ 75 a barrel.

    OPEC and the allies, including Russia, agreed in December to cut oil output sharply to prevent a supply oversupply this year.


    The OPEC-led cuts, along with US sanctions on Iran and Venezuela's oil exports, drove crude prices to the highest level in 2019 last week.

    However, the betting on price rises should be calculated with the entry of the second half of 2019.

    It predicted an impact on US oil exports and a possible easing of OPEC restrictions on production.

    "Saudi Arabia says markets will regain their balance before June, which means there will be no need for further supply cuts in the second half of 2019," analysts at Goldman Sachs wrote.

    Long-term prices are likely to remain under pressure below $ 60 a barrel for Brent and $ 55 a barrel for West Texas because of the exit strategy from production cuts.


    For his part, the report of "Petroleum Economist" warned about the continuing exacerbation of the political crisis in Venezuela.

    It pointed out the serious repercussions on the production of crude oil in the country with the largest balance of global oil reserves.

    The report said that the presence of two competing presidents in the country led to the collapse of Venezuela's economy and increase the crisis and the US sanctions strict.

    It pointed out that the continuation of the political impasse leads to the aggravation of the decline in crude oil production.

    It pointed out that Venezuela is already moving to an unknown area.


    The Venezuelan state oil giant, the largest in South America, should now deal with an escalating political crisis, as it was bearing the economic turmoil caused by a new set of US sanctions.

    The report noted that Venezuela is effectively banned from exporting crude oil to US refineries.

     It pointed to a statement issued by the Treasury confirms that the determination of the US government to continue sanctions to prevent corruption and until the country returns to the democratic system - according to the American view.


    For the liquefied natural gas, the report "Petroleum Economist" explained that the year 2019 will be pivotal in the growth of supplies and the opening of new markets for exports of liquefied natural gas.

    It pointed out that the increase in critical investment decisions will affect the balance of supply and demand in the global market.



    The report said that the developments in 2019 are likely to resolve some of the key uncertainties surrounding the development of LNG business over the medium term, which in turn will significantly determine their long-term path.

    The report pointed out that we are likely to see many new LNG supply projects launched this year following the final investment decision.

    It pointed to the existence of a long list of new projects with a capacity of more than 230 million tons a year.


    As for market growth, the report said that in the medium term there will be expansion in markets, especially in China, which is the main determinant of demand, likely to balance the global supply and demand in 2019.


    Commenting on the breakthrough in the US-China negotiations, Wang Kun, China's ambassador to Vienna, said to AlEqtisadiah that China-US trade talks are making steady progress, which is a climate of optimism for the energy system, especially demand for fossil fuels.

    He pointed out that fears of shrinking growth are shrinking at a rapid pace.

    He stressed the importance of continuing coordination and dialogue between all parties of the energy industry and work together to achieve the highest degree of compatibility and balance of interests in a way to avoid economic crises and accelerated development rates.

    It pointed to the pivotal role of oil and gas in the global energy mix for many years to come.


    From his side, Reinhold Gutierre, director of oil and gas at Siemens International, said that the US sanctions on Iran and Venezuela have a large impact in the oil supply, especially from the heavy oil on which the refineries rely heavily.

    It pointed out that the US light production, which broke the barrier of 12 million barrels per day, unable alone to compensate for the shortage and ensure the stability and balance of the market.

    He pointed out that the market is already facing tight supply of heavy oil, especially with the coincidence of three important factors and influential sanctions on Iran and Venezuela, as well as strong cuts implemented by the OPEC producers' alliance and beyond.

    He pointed out that some international reports suggest the continuation of the pressure on the supply of heavy oil for at least six months.


    Andre Grosse, Asia Sector Manager at German energy company MMAC, said that there is a state of optimism with more price gains this year despite the fluctuations in prices from time to time.

    He pointed out that this optimism is supported by OPEC production cuts, as well as the impact of sanctions in Iran and Venezuela, all of which are in favor of tightening the supply of crude oil.

    He noted that the atmosphere of the current trade negotiations indicates strong opportunities to avoid the global slowdown, in addition to other positive indicators in the market include Saudi Arabia's continued reduction of its exports by less than 500,000 barrels of its OPEC quota, with the target of reducing exports to less than seven million barrels per day, which will translate into a consecutive rise in prices.


    On the other hand, in terms of prices, yesterday oil prices rebounded from early gains due to oversupply and continuing US sanctions on Venezuela.

    At 12:46 GMT, Brent crude futures were at $ 66.21 a barrel, down 91 cents, after rising earlier to a high of 2019 at $ 67.47.

    US crude was $ 56.52 a barrel, down 74 cents.

    Members of the Organization of Petroleum Exporting Countries (OPEC) agreed with non-OPEC members such as Russia to cut production by 1.2 million bpd this year to help rebalance the market and support prices.


    On the other hand, the OPEC basket of crude prices and its price rose 66.56 dollars a barrel on Friday, compared to 66.50 dollars a barrel the day before.

    The daily report of OPEC stated that the price of the basket includes the average prices of 14 tons of production of the Member States of the Organization with the third straight rise.

    The basket gained about two dollars compared to the same day last week, which recorded 64.87 dollars a barrel.​

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