Oil specialists and analysts expected the continuation of price fluctuations during this week, after a relative decline at the end of last week, due to the lack of certainty in the market and the rapid spread of new strains of the Corona epidemic and its great impact on the widening of the general closure and renewed concerns about global demand for crude oil, in addition to The impact of international disputes over policies for the production and distribution of new vaccines.
According to Al-Eqtisadiah, specialists said that crude oil prices receive support in return from the commitment of the "OPEC +" countries to reduce the oil supply, as the energy ministers in the group are preparing within days to hold the second monthly meeting of "OPEC +" ministers to consider the latest market data amid expectations of an extension commitment to reduce production and raise the level of compliance with the production quotas that were fixed last January.
Specialists say that energy companies faced wide challenges in the past year, and despite the devastating downturn in 2020 most of the major global companies withstood, pointing to a report by Rystad Energy confirming that upstream projects were under tremendous pressure due to market turmoil, but adjustment policies and pressure The spending paid off well.
Experts confirm that OPEC + is still optimistic about the market situation despite all the current challenges and is betting on a good recovery in global oil demand in the second half of this year and hopes to return soon to normal levels of fuel consumption and the rotation of the wheel of economic activity due to hopes of control on the pandemic.
In this context, Ross Kennedy, managing director of the international company "QHI" for energy services, says that the lack of certainty in the oil market leads to more price fluctuations, especially since the deployment of vaccines is facing many difficulties, in addition to negative reports about the epidemiological situation in Europe. And many countries of the world, specifically after the renewed injuries in the second-largest economy in the world, China, after a short period of recovery.
He added that "OPEC +" producers enter the second monthly meeting a few days later, amid continuous challenges regarding weak demand and the need to continue production restrictions to overcome the accumulated surplus stocks, explaining that many international companies have shown a strict commitment to OPEC + quotas, especially with the exclusion of raising Sanctions and the return of Iranian and Venezuelan production, in addition to the slowdown in Libyan production again.
Damir Tsprat, Director of Business Development at the International Technic Group Company, believes that the new American administration is showing a clear and strong bias towards renewable energy sources, and this has been evident with its quick decision to prevent new drilling licenses and cancel the heavy oil pipeline project between Canada and America, "Keystone..XL." ".
He noted that in response to the new US trends, many companies are now rapidly expanding into low-carbon sectors such as wind and solar energy.
Peter Bakher, an economic analyst and legal affairs specialist for energy, says that crude oil prices may face new pressures in light of the World Health Organization's talk of new epidemics and in light of the difficulties of recovering demand as a result of the closure and with the arrival of the pandemic to unprecedented levels in some countries, an example of which is Portugal.
He added that fossil fuel resources are under tremendous pressure due to the pandemic and because of the bias of the US administration on renewable energy resources, noting that the cancellation of the pipeline between the United States and Canada threatens the profitability and sustainability of Canadian heavy oil producers who are now living in a difficult operating environment, as crude oil prices threaten a long-term recession.
Arfi Nahar, a specialist in oil affairs at the International African Leadership Company, indicated that crude oil prices may face some recovery due to the US fiscal stimulus plan and thanks to OPEC + continuous efforts that are preparing for a new monthly meeting to assess market data, but on the other hand, there is negative pressure on Prices are due to the dissipation of hope in linking economically vital Canadian oil sands in the important US energy markets after President Joe Biden canceled the pipeline project approved by his predecessor, President Donald Trump.
She explained that the failure of Canadian oil to reach the American refining markets will lead to damage to many of the refineries specialized in processing heavy and very heavy crude oil, in addition to paralyzing the Canadian oil sands industry as a result of the grinding crisis that it is exposed to, as the United States is the main consumer of Canadian crude oil. It also imports 79 percent of the total oil Canada produces, according to Canadian foreign trade statistics for 2019.
On the other hand, with regard to prices at the end of last week, US crude prices slightly decreased at settlement after trading within a narrow range on Friday, as investors are concerned about the continuing global pandemic and the slow distribution of vaccines.
Brent crude contracts, the most active in the world, closed lower on the back of concerns about the distribution of vaccines and the effectiveness of one of them, and futures contracts for Brent crude for March delivery were settled 36 cents, equivalent to 0.6 percent, to 55.88 dollars a barrel. Brent’s March delivery contract was expired, while the most active April contract was settled to a drop of six cents at $ 55.04 a barrel.
U.S. West Texas Intermediate crude futures fell 14 cents, or 0.3 percent, to $ 52.20 a barrel.
A Reuters poll concluded that oil prices are expected to hover around their current levels for much of 2021 before the recovery gains momentum with the trend towards the end of the year.
Saudi Arabia is set to cut production by 1 million barrels per day in February and March. The compliance of the Organization of the Petroleum Exporting Countries and its allies, within the framework of the "OPEC +" group, improved in January, with production restrictions.
A Reuters survey concluded that OPEC oil production rose in January after OPEC + agreed to ease restrictions on supplies, but the increase was less than the agreed amount, in light of an involuntary decline in Nigerian exports to limit the increase.