• Rock oil is facing the problem of rising costs in drilling and services


    ​           The report of the Petroleum Economist stressed that the US oil rock, after three years of sharp decline, is now facing a rising cost problem both for drilling and oil-related services, the oil industry report said.
    Since late 2014, oil shale oil producers in North America have seen a significant drop in the price of parity at the start of production from the oil well. Rock oil in the United States has witnessed a 20 percent dropping on an annualized basis in 2015 and 29 percent in 2016.
    The report said that the drop in the prices of oil units was the main engine to achieve a decline in levels of parity and continuous improvements in efficiency, pointing out that the decline in unit prices and operating expenses contributed about 57 per cent of the decline in the price of parity, while the high gains contributed to increasing efficiency By 18 and 25 per cent, respectively.
    The report pointed to similar large reductions in the costs of producing sand oil in Canada, indicating that since the collapse of crude prices in late 2014, Canadian oil sands producers can reduce production costs widely.
    The report said some of these reductions are cyclical and the length of all aspects of the industry also helped the weak Canadian dollar also to reduce the local costs estimated in US dollars was also focused on increasing the effectiveness of energy use and gain in efficiency of operation.
    Crude oil prices rose and hit an 8 week high on positive and positive moves by producers, led by Saudi Arabia, which made drastic cuts in their oil exports.
    Prices were supported by the drop in oil inventories and increased confidence in the cut-off agreement, especially after the St. Petersburg meeting, which showed producers' response to production reduction plans and quotas and their strong desire to improve commitment levels and support joint action to address radical market supply bottlenecks. .
    "The production of US rock oil is already facing many challenges, notably the return of higher production costs, especially from the new production areas, while prices are fluctuating, with significant declines, " said Bernard Meyer, a professor of geology at the University of Calgary, Canada. Working on a production cut agreement in May.
    He pointed that the traditional producers are exerting intensive efforts led by Saudi Arabia and Russia to reduce the current supply gap. Saudi efforts may be the most prominent, especially after the decision to reduce oil exports next month by about 1 million barrels. The results of these efforts have begun to become clearer in the market, Nigeria to stop the state of production competition and the commitment to freeze production at 1.8 million barrels per day.
    "The OPEC and its independent producers have left the door open to several scenarios to deal with the oil market in the coming months, including the possibility of extending production cuts beyond March," said Daisuke Takoushi, director of Osaka Gas in Britain. 2018 and expectations of an emergency meeting to bring in new producers and deepen cuts, all of which are smooth and flexible and raise confidence in the success of the producer cooperation program.
    The reduction of Saudi Arabia and the UAE to their level of exports, Nigeria's agreement to restrict production levels and the high level of compliance of producers in cutting output to more than 90 percent are all positive and promising to restore short-term balance and stability in the market, possibly before the end of the year.
    "The improvement in demand, the decline in inventories and the contraction of US supplies are all indications that the market is on the right track, and that OPEC's vision was realistic and far from over-optimistic," he said. Underestimation of market problems.
    He expected that future OPEC meetings, whether at the ministerial or technical level, will witness more effective decisions that are compatible with market developments. He pointed out that Libya may limit production before the end of the year, as agreed on Nigerian production.
    He also predicted a slowdown in drilling activities in the coming weeks due to increased costs of US production and the survival of prices without the aspirations of oil producers rock.
    US crude inventories fell sharply last week as refinery production increased, gasoline inventories rose and distillate stocks fell, data from the US Petroleum Institute showed on Wednesday.
    Crude stocks fell 10.2 million barrels in the week ending July 21 to 487 million barrels, compared with expectations of a 2.6 million barrel decline.
    On the other hand, oil prices fell slightly in the European market yesterday, by correction and profit taking, after yesterday's prices, the largest daily gain since November 2016, and the highest level in seven weeks, and is expected to continue to rise prices, especially after The US crude stockpile is down sharply, according to industrial data from the US Petroleum Institute, as well as Saudi Arabia's pledge to cut oil exports in the next month to reduce supply oversupply.
    US crude finished up 4.5 percent on Monday, its second daily gain, with the biggest daily gain since November 30, 2016. Brent crude climbed 4.3 per cent and hit a seven-week high of $ 50.90 Per barrel. In an unofficial report, the US Petroleum Institute said crude inventories in the country fell by more than 10.2 million barrels for the week ending July 21, and experts expected a 3.0 million barrel decline, the third weekly drop in a month.
    According to the data, total inventories reached 512 million barrels, the lowest level since the week ended January 27, in a positive sign of improving demand levels in the world's largest oil consumer. The US Energy Information Administration (EIA) forecasted a 3.3 million barrel decline, the fourth consecutive weekly decline.
    Minister of Energy, Industry and Mineral Resources Khaled Al-Falih said after the meeting of producers in the Russian city of Saint Petersburg that Saudi Arabia will reduce exports to 6.6 million barrels per day in August, about 1 million barrels less than the levels of exports during the same period last year. .
    For his part, Russian Energy Minister Alexander Novak said 200,000 barrels per day of supply could be removed from the market as compliance with the implementation of the cut-off agreement reached 100 percent. Nigeria has agreed to join the global production cut-off agreement by setting a production cap of 1.8 million barrels per day and Nigeria is currently pumping 1.7 million barrels after an acceleration in operations in the Niger Delta region.
    OPEC crude basket rose $ 47.11 a barrel yesterday, compared to $ 46.01 a barrel the previous day.
    The daily report of the Organization of Petroleum Exporting Countries (OPEC) said yesterday that the price of the basket, which includes average prices of 14 tons of production of the member countries of the Organization achieved the first rise after two previous declines, and the basket earned less than a dollar compared to the same day from the previous week, which recorded 46.45 Dollars per barrel.

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