* Osama Suleiman from Vienna
Oil prices continued their bullish course after hitting a three-week high supported by comments from the world's top crude exporter, Saudi Arabia. The kingdom would continue to restrict shipments in line with the OPEC-led efforts to cut the world supply.
US West Texas Intermediate crude that is for delivery in April rose 4 cents to $ 63.59 a barrel by 08:04 GMT after rising 3 percent last week. Brent crude fell 3 cents to $ 67.28 a barrel after jumping nearly 4 percent last week. The two crudes had earlier hit their highest level since Feb. 7.
According to Reuters, the prices received support after the Minister of Energy, Industry and Mineral Resources, Khaled Al-Faleh, said last Saturday that the Kingdom's production of crude during the period from January to March will be below the target ceiling. That exports will be less than seven million barrels per day on average.
According to the report, "Petroleum Economist" International, China will continue to play a major role in driving demand for crude oil. It pointed to the growth of large refineries in China, thanks to large import quotas. The report said that 2018 would be a year of extensive activity in Chinese refineries. It indicated that this growth was widespread and exceeding previous expectations. It pointed out that the Chinese government increased its share of oil imports by 55 per cent compared to 2017. It added that this figure has important implications on the market. The report said that the new government arrangements announced by the Ministry of Commerce in early November. Allowing the non-governmental refineries to import 142.42 million tons of crude oil this year compared to 91.73 tons in 2017. The report pointed out that this private sector share, which is much higher than expected, confirms the growing strength and modernization of refining capacity in China to reach a high quality refining level, with Beijing reducing its import duties in general. Oil production is still high in the market, but falling prices and pipeline problems in Canada and the United States have had a negative impact on industry, the report said. The demand for crude oil will be good this year, and the gas will be at the forefront in the long term.
The report pointed out that some estimates predicted a slowdown in economic growth in some economic forces because of the possibility of slow growth in demand for energy. Pointing out that last year's data revealed the inaccuracy of these estimates, as the strength of China's economy was much better than many previous forecasts. The report said fears of slowing growth were the main question that most investors had in 2018. However, OPEC has relatively scaled back these fears by confirming good demand growth this year through adjusting world demand estimates to 1.6 million barrels per day, while some were betting on a drop in demand from China by about a third. Crude oil prices started trading this week on a stable state through the support of Saudi statements and OPEC efforts to control oil supplies in cooperation with independent producers after several record highs.
In this context, Goran Geras, assistant director of the bank "ZAF" in Croatia, stated to the Economist, "the US production continues to achieve qualitative and quantitative leaps. This has made many international organizations concerned, such as the Energy Agency and OPEC, constantly adjust their forecasts for US production flows, which has already exceeded the level of 10 million barrels per day and is likely to continue the march to 11 million barrels per day." He added that the American production benefits from the adaptation of advanced technology and the efficiency increased, as well as the implementation of many successful acquisition deals in order to make the companies more powerful and solid in the face of market variables. In contrast, he pointed out that OPEC is not disturbed by this boom, however, it sees the market on the full balance that are supported by the growth of demand.
Reinhold Gutierre, director of oil and gas management at Siemens International, stressed to the Economist that the large and sudden drop in the level of oil stocks has supported prices broadly and led them to record new levels. It also reflects the success of the vision of OPEC and its independent partners, which led by Russia, in dealing with the market. He said that the plan of action of "OPEC" according to Saudi Arabia and Russian assertions will be completed this year and will go beyond the coming years, but with different and more sophisticated visions that suit the needs of the market. It may also be used to adjust the level of production reduction by decreasing it and also to include new producing countries, to finalize new standards for measuring and calculating stocks, and to compare exports with production volume and other mechanisms with higher levels of efficiency in producers' work.
Moreover, David Ledesma, director of Southcourt Energy Consultants, stressed to the Economist that the interruptions of Libyan production have returned to a new look and affect the level of prices in the market because of labor protests this time. This led to the halt of the El-feel oil field, which stressed the need to work to promote stability in Libya as a prominent member of OPEC and the leading producers of North Africa. He added that the Libyan production is still dominated by the state of swing that has not recovered yet. And it is currently around 800 thousand barrels, according to last year statistics. He pointed out that these fluctuations and interruptions might not stimulate OPEC to raise the exemption granted to both Nigeria and Libya because of the special political situation in both countries.
OPEC crude basket rose $ 64.16 a barrel on Friday, compared to $ 63.08 a barrel the previous day.
The daily report of the Organization of Petroleum Exporting Countries (OPEC) said that the price of the basket, which includes the average prices of 14 tons of production by the member countries of the Organization, achieved its second consecutive increase. The basket also earned about two dollars compared to the same day last week, which recorded 62.41 dollars per barrel.