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.
