Oil prices jumped yesterday by about 8 per cent to the highest level over $ 54 a barrel in the early trading, after a week of swinging as it reached to $ 50 a barrel.
Observers considered that the jump in prices yesterday is a clear indication of the response of the world oil markets to the warnings of OPEC + "To hold an exceptional meeting to review the market and implement an urgent reduction in the event that markets need it."
Suhail Al-Mazroui, UAE's energy minister, said in a press statement, "If the new reduction of 1.2 million barrels per day will not stop, we will meet exceptionally and do what is sufficient to balance the oil market."
He added, "the extension of the new agreement on oil cuts will not be a problem and we will do what the market demands."
According to "Reuters", US crude and Brent rose nearly 8 per cent yesterday.
US crude rose $ 2.86 a barrel, or 6.78 per cent, to reach $ 45.48 per barrel.
Global Brent crude added $ 3.12, or 6.62 percent, to reach $ 54.12 a barrel.
Margaret Yang Yan, market analyst at CMC Markets in Singapore, said, "The $ 50 level is psychological support for Brent."
Olivier Jakob, analyst at PetroMatrix, said, "the retreat exceeded the limit somewhat due to concerns of the global market. It's all about stocks. OPEC has shown its desire for higher prices and is working towards that goal."
Stephen Innes, an analyst at the OANDA Financial Group, said, "Unless OPEC finds a magic solution and reassures the markets that its deductions are credible through a decision to make larger cuts, as some members have suggested, macroeconomic concerns will continue to affect markets."
Trading was weak due to holidays, Asian stock markets fell again yesterday, while markets remain closed in Britain, Germany and France.
Kazakhstan Energy Minister Kanat Bozumbayev said yesterday that his country expects that "the participants would reach a global agreement to reduce oil production to stabilize prices in the first quarter of 2019 and issuing a joint statement next month to support the market."
The Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia and independent producers, including Russia, agreed this month to start production cuts in January in order to ease supply overshooting the price of crude oil and pushing it to its lowest level in more than a year.
The minister said in a press statement, "All these countries must stabilize the situation with effective measures in January, February and March. Prices have to stabilize and enter a somewhat positive range."
He did not give details of the statement expected in January, but he said he discussed the situation with key parties to the deal, including Saudi Arabia, Russia and the United Arab Emirates and OPEC Secretary General Mohamed Barkindo.
Bozumbayev added, "Kazakhstan plans to reduce its oil production to 89.5 million tons next year from 90.3 million tons this year, partly due to planned closures in its three largest oil fields: Kashagan, Karachaganak and Tengiz."
In addition, the estimates of three global banks for crude oil prices varied during the new year between price recovery, stability and the possibility of a decline due to the uncertainty that has dominated the markets in the recent period.
The forecast data for Goldman Sachs stated that oil prices offset some of the losses incurred in the past two months and recover by the beginning of 2019.
On the other hand, JPMorgan cut its outlook on Brent crude prices from $ 83.50 per barrel in 2019 to $ 73 a barrel, due to oversupply and fears of an economic slowdown.
Citigroup indicated there will be no dramatic changes in oil prices next year, where the rise in production in the United States will compensate for the OPEC + cuts, according to the estimates of the largest investment bank in the global market.
Recent Brent data said the price of Brent crude at around $ 60 per barrel was the average weighted price over the months of next year.
The report of RegZone International indicated that crude oil prices fell by nearly 25 per cent last month alone.
This is the biggest monthly loss in a decade, as traders fear a potential global supply will continue.
According to the report - drilling and stockpile activities - record production in Saudi Arabia, the United States and Russia has largely helped lower prices to their lowest levels since October 2017, in addition, US concessions to eight Iranian oil importers have eased supply concerns.
It added, "In terms of demand levels, the strength of the dollar has made oil more expensive for global importers, which has affected consumption. Concerns about global economic growth have also dampened oil demand and created a bearish market despite a recent deal to suspend the new tariffs for 90 days. But, the US-China trade war continues to raise uncertainty about economic growth for 2019."
The report predicted that the price of West Texas crude oil was between 64 and 72 dollars in 2019.
It pointed out that this is below the level of 72 to 80 dollars, which was expected a few months ago, when expectations were widely attributed to the continuation of US sanctions on Iran, which supports prices.
The report pointed out that Brent crude oil international standard is more affected by geopolitical events and international, as well as the fluctuations in global demand, which differ with the same price movements and the pace of economic growth.
It is likely that the average price of Brent crude will be around $ 72 to $ 80 for 2019.
Dan Bosco, chief analyst at British bank UniCredit, said to the Economist, "Many global banks are likely to slow growth over the next year. But this will not lead to a large recession or an economic crisis because of the many mechanisms that protect the global economy."
Bosco predicted that the current market turmoil would not last long because production cuts will likely be extended until a full balance is restored in the market, thanks to the continuous co-ordination between OPEC and its producers.
He noted that oil is a sensitive indicator of expansion or economic downturn.
David Disma, an analyst at South-Court Ltd, explained to the Economist that the oversupply is still dominant in the market and is the reason for some negative expectations.
But there are positive expectations, including the Swiss bank UBS, which is expected to restore oil prices level of $ 80 a barrel next year.
He pointed that the Swiss bank and other European and global banks are counting heavily on OPEC-led production cuts to be implemented by next year, as it is likely to lead the market to restore balance by treating excess supply as it did in 2016.
Katie Krinsky, director of RBC Capital Markets, said to the Economist, "The agreement of OPEC + will become evident in successive effects in the first months of the new year, especially in the light of the expectation of voluntary cuts affecting Saudi Arabia's oil exports along with sharp declines in Venezuela's production due to the economic crisis, and Iran's production due to US sanctions."
In the opinion of Krinsky that Saudi production has great flexibility and ability to adapt and deal with the latest developments in the market.
She pointed out that Saudi Arabia will probably bear alone 500 thousand barrels per day of 800 thousand barrels per day is the share of OPEC countries in reducing production, which is a calming of the high and standard production pace that jumped Saudi production above 11 million barrels per day last month.
