Crude oil prices started the week’s trading on losses due to the rapid spread of the second wave of the Corona epidemic in the world, and its wide impact in destroying global demand for fuel, in addition to the impact of successive increases in Libyan production after restarting all oil fields.
The market continues to await the US presidential elections to be held within days, amid fierce competition between candidates Donald Trump and Joe Biden, whose results will have repercussions on the stability of all markets, especially crude oil. The market is also looking forward to the decision of OPEC + producers at the end of next month regarding levels The cut applied in the new year.
He told Al-Eqtisadiah, specialists and oil analysts, that despite the worsening global crisis, Asian demand has recovered well, as it is close to restoring pre-pandemic levels, noting that China has boosted its imports of crude oil from the Middle East, as Shipments jumped 18.9 percent year on year at 5.16 million barrels per day in the first three quarters, according to the latest economic data in China.
The specialists pointed to the resilience of Middle Eastern producers, despite the repercussions of the widespread pandemic in Europe and America, where the Middle East region acquired 46.3 percent of the market share, compared to 43.8 percent in the same period last year.
The specialists explained that there are expectations and possibilities for new moves by "OPEC +" during the coming period, in light of the statements of Prince Abdulaziz bin Salman, the Minister of Energy, who confirmed that the oil market is going through difficult and dangerous times. In the same context, Russian President Vladimir Putin said, this week Al-Mady said, "He does not rule out delaying the planned OPEC + production increase at the beginning of next year."
Robert Stehrer, Director of the Vienna International Institute for Economic Studies, confirmed that global demand is in real trouble with the increasing impact of the losses of the second wave of the epidemic, but the picture is not completely bleak, as there is light at the end of the tunnel, as there are indications of the possibility of overcoming the difficulties of the current period, led by demand. Asian demand in China specifically.
He added that "international statistics indicate that the United States became the fourth-largest supplier of crude oil to China last September in terms of volume." He expected that oil flows to the United States would be ample in the fourth quarter of this year driven by the obligations of the first phase deal of The trade agreement between Beijing and Washington that provides the impetus for the flow of crude oil and energy products into China.
For his part, Alexander Bogle, a consultant at the international "GBC Energy" company, said, "The problem of supply inflation has returned to cast a strong shadow over the market in light of the most important OPEC producers in Africa, Libya, who are planning to double production to more than one million barrels." Every day within four weeks after the signing of the permanent armistice agreement brokered by the United Nations, "indicating that the revenues of the oil industry have largely declined due to the price environment pressuring it. He explained that a study conducted by the "Boston Capital" group revealed that the average return on capital used in exploration and production activities among the major oil companies collapsed to 3.5 percent, compared to more than 27 percent in 2006.
For his part, Radolph Huber, an energy researcher and director of a specialized website, explained that the collapse in oil demand due to the Corona pandemic prompted the industry to close some production, especially in the United States and Canada, pointing to the increasing international concern also about climate change, and an example of this faced companies Canadian oil sands in Alberta were criticized over carbon emissions.
In turn, Nila Hengstler, Director of the Middle East Department at the Austrian Federal Chamber, said, "The return of dense Libyan barrels to the market imposes new difficulties on the OPEC + action plan for the coming period, as the group seeks to support crude oil prices in light of a turbulent and weak market due to a flare-up The second wave of Coronavirus cases, especially with many major economies imposing closures again.
With regard to prices, Brent contracts fell $ 1.31, or 3.14 percent, to settle at $ 40.46 a barrel, while US oil futures contracts at settlement recorded $ 38.56 a barrel, down $ 1.29, or 3.24 percent.