*Osama Suleiman from Vienna
Oil analysts told the Economist that the major oil companies are still optimistic about the continued rise in crude prices, which receives significant support from the United States announcement to cancel the exemptions granted to eight countries of buyers of Iranian crude over the past six months, as of the second of May, which strengthened the state of confidence in the continued narrowing of the market and shrinking supply, especially with the desire of the Alliance of producers in the OPEC + for not to rush to increase production pending a significant recovery in demand levels.
Oil analysts expect oil prices to remain volatile this week, after ending last week with a 3% decline and a six-week downtrend.
Consumer pressures are mounting to increase supply and calm prices, while OPEC and its allies are unlikely to offer to cancel or reduce the reduction agreement prior to the market review in June.
In this context, Dr. Nagendra Komendantova, a senior analyst at the International Institute of Energy Applications, stressed that the rise in prices is the dominant feature of the market even if there is some fluctuation from time to time due to complete instability.
She pointed to OPEC's assertion that the market is well-equipped and that new production increases will be linked to a corresponding growth in oil demand levels.
She noted to the Economist that the major oil companies - as a result of optimism of the continued rise in prices - plans to increase investment and capital spending by about five trillion dollars over the next decade.
Typically, the pace of investment in traditional energy resources will run into the pressure of the Paris Agreement on Climate Change in 2015 and international efforts to reduce harmful emissions.
For his part, Ross Kennedy, Managing Director of QHi Energy Group Inc, told the Economist, "Prices are closer to continuing volatility this week as the implementation of the decision to cancel the US concessions, which China is trying to resist along with Iran. The extent of commitment and effectiveness in the implementation of the resolution and the extent of the possibility of flexibility in the application of the American side will be clear in the coming days."
Kennedy pointed out that the compensation of Iranian production in case it reached zero level is not a difficult task, especially by Saudi Arabia and the United States and some producers of the Gulf.
There is agreement to take appropriate action in a timely manner to meet the needs of global demand and to hedge well the possibility of deducting Iranian production entirely from the supply of oil.
For his part, Goran Jeras, assistant director of ZDF Bank in Croatia, explained to the Economist that Russia has a strong desire to increase production, which is evident in the positions of officials of the company, "Rosneft."
He noted that the cancellation of US concessions will support Moscow's desire to increase production and adopt an initiative to stop production cuts during the producers meeting in June, especially as Russia leads the group of independents from outside OPEC.
Jeras believes that Russian companies have been concerned about their market shares, which are shrinking relatively while market shares are expanding for US producers.
He pointed out that the deduction of Iranian production will affect the contraction of oil supply during this quarter and perhaps until next year, as producers in OPEC and elsewhere will therefore provide compensatory supplies to meet consumers' needs.
Marcos Krug, Senior Analyst for E-Control Oil and Gas Research, said to the Economist, "Oil prices hit record highs a few days ago, but ended the week lower because of expectations of some financial circles that Iran's crude exports to zero, which made the market in the case of a continuous assessment of the current situation of the seriousness of its application."
The market will continue to fluctuate because of the relative blur of the situation, while the OPEC countries are very cautious with a return to the increase in production at record levels in order to not to exhaust the standby power and also to avoid a return of oversupply and surplus stocks perhaps more broadly.
Oil prices fell 3 per cent at the end of last week, where profit-taking sales after the longest chain of gains for the oil market in a year, contributed to a fall in prices.
According to "Reuters", Brent crude futures ended the trading session low $ 2.20, or 3 per cent, to settle at $ 72.15 per barrel.
US WTI crude fell $ 1.91, or 2.9 per cent, to settle at $ 63.30 per barrel.
Brent ended the week steady after four consecutive weeks of gains, while US crude recorded a 1.2% loss over the week, reversing six consecutive weeks of gains.
Oil contracts have surged more than 30 per cent this year after OPEC and allied producers cut supplies by 1.2 million barrels per day with crude output in Venezuela and Iran falling due to US sanctions.
On Thursday, Brent rose above $ 75 a barrel for the first time this year after Germany, Poland and Slovakia suspended imports of Russian crude via the head pipeline due to pollution.
Moscow said, "Oil may have been deliberately polluted and is planning to resume supplies of crude through the Druzhba pipeline to Europe in two weeks."
The number of oil rigs operating in the United States this week the biggest decline since the week ended on the eighteenth of January as energy companies continue to suspend drilling for the second week in a row and for five consecutive months as independent producers go ahead with plans to cut spending on new drilling.
Baker Hughes Energy Services, in its closely monitored report, stressed that the drilling companies stopped the operation of 20 oil drilling in the week ended April 26, which is bringing the total number of rigs to 805.
The number of active oil rigs in the US, a preliminary indicator of future production, fell from a year ago when there were 825 diggers in operation.
According to Baker Hughes, the average number of active oil and gas rigs in the United States since the beginning of the year is 1036, looking to record the highest annual level since 2014, most excavators produce oil and gas.
Data from the US Energy Information Administration showed that US crude oil inventories are trading in the United States, which increased last week by 5.5 million barrels to 460.6 million barrels, the highest level since October 2017.
Analysts included in a poll of "Reuters" had expected an increase of 1.3 million barrels, as the data showed that net US crude oil imports rose last week by 877 thousand barrels per day to 7.1 million barrels per day, which is the highest level of imports since mid-February.
According to data from the Energy Information Administration, US crude oil production rose by 100,000 barrels to a record high of 12.2 million barrels per day.
