Oil prices started the week trading - unexpectedly - with price declines, due to weak data for Chinese exports and renewed market fears of the repercussions of the trade war between the United States and China, and its wide effects on global oil demand.
And falling prices dampen the decision of the OPEC producer alliance outside the country last week to deepen production cuts by an additional 500,000 barrels per day, to reduce the abundance of supply in the markets in the next year, which is expected to witness successive increases from a number of producers, most notably of them shale oil producers American.
Oil analysts believe that the approval of "OPEC +" to reduce production by an additional amount of 500 thousand barrels per day has had a positive and immediate return on the market, as the market was thirsty for this step by the producers, as it led to high oil prices last Friday, and mixture crude approached. Brent standard from $ 65.
Analysts added, "The trade war and its repercussions returned at the beginning of the week to cast a strong shadow on the market again, especially with the coincidence of weak data on exports in China," noting that among the positive factors supporting the market, the reduction will not be limited to 1.7 million. Barrels per day, after Saudi Arabia, confirmed that it will continue its voluntary reductions in excess of what is required and by about 400 thousand barrels per day.
In this context, he explained to "The Economist", Robert Stehrer, Director of the Vienna International Institute for Economic Studies, that the selection of the Producer Alliance only three months to make deep production cuts reflects the conviction of the producers that the state of abundance of supply will not be long, and will be limited to the first quarter that usually witnesses The weak seasonal demand due to the maintenance of American refineries.
Stehrar added "producers are betting that the next three months could see positive developments in the trade war will have a supportive effect on economic growth, recovery of oil demand," noting that the war trade concerns returned to receive a strong shadow on the market with the start, especially in light reading week international analysts of the reality of weak manufacturing and export two activities in China, the second-largest energy consumer in the world.
For his part, says to "Al-Eqtisadiah", Damir Zbrat Business Development Manager at the International "Technic Group", "The producers in the" OPEC "and abroad are hoping to control the oversupply in the first quarter through the recent decisions, which add 500 thousand barrels to the previous reduction, but some other international estimates of such data, "Commerzbank" German warns that excess oversupply in the first quarter may exceed 500 thousand barrels per day, which adds burden to the success of "OPEC '" plan.
Another part, Lucas Berterer, an analyst at the Austrian OMV company for oil and gas, told to "Al Eqtisadiah" that OPEC and its allies are focusing at this stage on raising the level of compliance with production cuts as a password in the success of the cooperation plan between producers and for control Actors and quick on the abundance of supply in the markets, pointing to Goldman Sachs assertion that choosing a short period of discounts puts producers at stake and highlights how they cooperate to contain the crisis and the extent of responsiveness and transparency of performance in all countries of production.
Berterer noted that "OPEC " faces a major challenge in balancing the market and controlling the supply glut, considering that this does not depend on its performance alone, but it also depends to a large extent on whether American shale oil can continue to grow or will slow and contract at influential levels. Pointing to the estimates of international research agencies such as "Restad Energy", which believes that the growth of oil shale oil continues even if US crude continues to revolve around a price level in the mid-fifties.
In turn, she tells to "Al-Iqtisadiah", Nayla Hengstler, director of the Middle East and Africa Department at the Austrian Federal Chamber, that "the recent OPEC decisions need strict accuracy and balance in implementation, because excessive reduction or increase is not in the interest of the market," noting that The new cut If the prices were raised to a large level, American shale oil producers would return to accelerate the pace of drilling, which would increase supply again and press "OPEC +" to make deeper cuts, which would waste their market shares.
According to "Reuters", Brent fell 64 cents, or 0.99 percent, to 63.75 dollars a barrel, after gains of about 3 percent last week thanks to news of increased production cuts by "OPEC" and its allies.
West Texas Intermediate crude futures also fell 64 cents, or 1.08 percent, to $ 58.56 a barrel, after rising 7 percent last week, thanks to expectations for OPEC production cuts.
Jeffrey Haley analyst at "Luanda" markets, said, "it is clear that China is not immune to the US tariffs, nor against the continuing slowdown in the world economy in general." In contrast, China's imports rose from oil to a record high on a daily basis in November (November) last with high rates of refinery consumption quotas annual supply.
China imported the largest buyer of oil in the world 45.74 million tons of oil, equivalent to 11.13 million barrels per day, according to data issued by the General Administration of Customs in China.
This is compared to B10.72 million barrels a day comes in October (October) and 9.61 million barrels per day in November (November) last year.
The data showed that China's total imports in the first 11 months of 2019 amounted to 461.88 million tons, or 10.09 million barrels per day, up 10.4 percent from the same period last year.