• Optimism in the oil markets near to reach a trade agreement and the decline of political tensions


    Osama Soliman from Vienna​

    Analysts had predicted the continuing rise in oil prices this week, after trading closed on gains by about 4 per cent of the end of last week, supported by improved economic indicators in the United States and China and the emergence of signs of reaching a trade agreement between the two countries resolved some of the trade disputes.​

    ​Analysts believe that the agreement to reduce production between "OPEC" and outside requires further development in the coming months to face very rapid changes in oil markets, pointing to the importance of full compliance with the levels of quotas to help the market to balance and absorb the abundance of supplies led by US production and some other countries such as Brazil.​

    ​​​Analysts stressed the importance of the next ministerial meeting of OPEC + countries next month to review and manage the reality of the market and determine the next action plan and the course of cooperation agreement, pointing out that the producer alliance is currently reducing 1.2 million barrels per day of the market, a deal started in January ( Expected to expire at the end of the first quarter of 2020, and the chances of extending and deepening the cuts seem strongly.​

    ​OPEC production in September fell sharply to the lowest level in nearly 17 years due to terrorist attacks on two oil facilities in Saudi Arabia, as well as the impact of US sanctions in Iran and Venezuela, but Saudi production quickly recovered from the crisis and occurred a quick return to normal levels of production last month.

    Robert Stehrer, director of the Vienna International Institute for Economic Studies, told the Al-Eqtesadiyah that "oil prices will record more price fluctuations during the remainder of this year," explaining that the market is moving strongly towards trade negotiations and what could result From the progress on trade disputes, the trade war will usually continue to have a strong impact on the price movement of crude.​

    ​Shtehrar added that "improved economic data in both the United States and China has an impact - without a doubt - in reviving hopes of demand growth, and thus may see good price gains in the short term, especially if US stocks level continued to decline at good rates, indicating that prices receive support from news about leaks in the oil pipeline in the United States lines, which reduces the pace of US supplies.

    For his part, explained to the "Al-Eqtesadiyah​", Rudolf Hopper, energy researcher and director of one of the specialized economic sites, that the uncertainty strongly dominates the expectations of the oil market. He pointed out to the UAE Energy Minister Suhail Al Mazrouei that the results of the ongoing trade talks between the United States and China will determine the expectations of oil demand for 2020 and 2021, taking into account the escalation of geopolitical tensions continuously.

    Huber pointed out that the outbreak of trade dispute between Washington and Beijing and the continued escalation led to lower expectations of global demand growth, which led the International Energy Agency to lower its estimate of oil demand growth for next year.​

    ​​​According to "Reuters", Brent crude ended the global Brent trading session high $ 2.07, or 3.5 percent, to reach the settlement of $ 61.69 a barrel, but it ends week low around 0.4 percent.​

    The US has stepped up Brent crude contracts for WTI of $ 2.02, or 3.7 percent, to record at the settlement of $ 56.20 a barrel, but fell 0.8 percent over the week.​

    ​Survey showed that it expected oil prices to remain under pressure in the current and next two years, predicted a survey of 51 economists and analysts that the price of Brent average of $ 64.16 a barrel in 2019 and $ 62.38 a barrel next year.​

    Concerns about global economic growth as well as oil demand eased after US Trade Secretary Wilbur Ross said the "first phase" of a trade deal with China appeared to be in good shape and was likely to be signed around the middle of this month.
    On the other hand, US energy companies reduced the number of oil rigs operating for the second week in a row with independent producers cut spending, while the record production of crude affect the expectations of energy prices​
    ​According to Baker Hughes Energy Services Company, in its weekly report, which has a follow-up document, the drilling companies turned off the five oil rigs the week ending on the first of November (November) the total number of rigs to drop to 691, the lowest since April 2017.
    US oil output jumped nearly 600,000 BPD in August to a record 12.4 million BPD, supported by a 30 percent increase in Gulf of Mexico output.​
    ​In contrast, Russia has reduced oil production by 211 thousand barrels per day on average last month compared to the month of October (October) 2018, a month used to measure commitment to the Global Compact cuts oil production rate.
    This is still below the level pledged by Russia under the agreement with the Organization of Petroleum Exporting Countries "OPEC" and other independent producers, which is 228 thousand barrels per day.​
    According to preliminary data from the Russian Energy Ministry, reported by the Bloomberg News Agency, the country's production of oil and gas-intensive in October amounted to 47.49 million tons, or 11.229 million barrels of oil per day on average, compared to 11.25 million barrels in September.​​
    Thus, Russia exceeded the ceiling of the daily production of "OPEC +" by 39 thousand barrels per day last month.
    The Russian energy minister said in mid-last month, that his country will abide by the agreement "OPEC +" in October (after) after non-compliance in September.

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