The
Kingdom efforts to restore confidence in the international oil market
have been confirmed by the Minister of Energy, Industry and Mineral
Resources, Khaled Al Falih. The Kingdom has exerted every effort to
restore good levels of confidence in the performance of the oil market. Production in which OPEC countries and two non-OPEC countries participated in the Russian city of St. Petersburg last week.
Saudi
Arabia has provided the largest possible support to market balance and
price recovery when it promised to cut its exports to the lowest level
in six years by next month, the agency said. The committee also revised
the criteria for monitoring producers' performance by examining the use
of export data as a major measure of compliance in the process of
reducing production, , Who holds the rotating presidency of OPEC.
"Saudi
Arabia will continue to bear the brunt of OPEC production cuts,"
said Minister Khalid AlFaleh, adding that Saudi exports will reach 6.6
million barrels per day in August, a drop of 1 million barrels per day
from peak levels recorded by Saudi Arabia oil exports 2016.
The report added that this low level of Saudi oil exports is already
the lowest in six years and is part of an attempt by the producers'
alliance to mitigate market competition and reduce the dimming
situation, in addition to using export data as a measure of compliance
with the agreement.
The report pointed out that the Ministerial Committee has a
comprehensive and accurate vision of the risks of increasing oil export
flows in the current stage to block the recovery of the market and
responded to the remarks and concerns raised by Russia on the divergence
of sales of crude oil and different from the quotas set in advance.
"The producers now have a good view of the future of the cut-off and
market-handling measures in the next phase," the Platts report said.
"The last meeting touched upon an important problem: what will happen to
the market when the March production agreement ends?"
The
report said that producers prepared for this period a number of
alternatives that will avoid the market a lot of risks and fluctuations,
either there is a smooth and safe exit from cuts or openness to the
idea of extending the agreement to reduce production for a new period
by a comprehensive consensus of producers is the proposal closest to
implementation and will have a positive impact On prices and overall market positioning.
The report pointed out the importance of inviting Nigeria and Libya to
reduce their production balanced and accurate and take into account the
difficulties faced by those countries affected by political conflicts
and conflicts over oil resources.
The report stressed the continued call for all producers to ensure
full compliance with the reduction of production agreement, saying that
the agreement finally witnessed a decline in compliance by Ecuador and
Iraq, which negatively affected the agreement and led to uncomfortable
results in the market.
The report said there was a consensus between Saudi Arabia and Russia
on performance control and compliance with the cut production agreement,
pointing to Russian Energy Minister Alexander Novak, who said that
producers not affected by the low level of commitment would be under
pressure from other participating countries.
"We will not tolerate those who want to ride for free," he said.
The
report pointed out that addressing market difficulties will not be
limited to the strong positions of producers, but will need to be
supported by clear procedures and verifiable evidence, which will avoid
uncertainty and support levels of confidence. However, it may also be
difficult to find a system that measures exports purchased by importers .
The report said that it would be difficult to maintain the deal to
restrict production if crude oil inventories did not fall steadily,
especially in the current quarter, where refining operations are high
seasonally.
The report quoted Minister Al-Falih as saying that there is room in
the market to absorb 800,000 barrels per day (bpd) or an additional 1
million barrels per day from the revenue of the countries involved
in the cut-off agreement, either in OPEC or outside of it due to strong
demand expected in the remaining months of this year.
The
report notes that Libya and Nigeria are still moving towards higher
increases in production levels, adding that production in Nigeria has
finally faltered, while Libya is moving ahead with increased production
and its production levels have exceeded 1 million bpd to 1.25 Thanks to the continuous progress in the technical fields.
The report said there was strong determination on the part of Saudi
Arabia and Russia to urge Opec members and non-OPEC members to adhere to
producers' plan and vision to address market problems and restore
balance.
The Platts report added that the current price level may not be
satisfactory to the aspirations and aspirations of producers looking for
better price levels, considering that this vision will increase the
pressure on producers to agree on more work sooner rather than
later.
Oil
prices closed on record gains last week, exceeding 8 percent, and the
highest level in two months, said Goldman Sachs banking group is
"cautiously optimistic" about oil prices, noting that recent economic
data confirm that the process of rebalancing the oil market Moving at an accelerated pace.
She predicted that if current clouds of oil stocks continue, stocks will return to normal by early 2018.
Although the OPEC production track is still uncertain, the latest oil
core data came in better than many expected in the market, according to a
report by international oil specialist Goldman Sachs.
"If these trends continue, this will help"If these trends continue, this will help the return of oil stocks
to health and natural levels by the beginning of next year," the report
said.
The
report pointed to the assertions of "Goldman Sachs," who explained that
the recovery of oil prices during the past month thanks to strong
demand and strong diligence in controlling the surplus of US stocks and
the decline in the number of US excavators, noting that oil prices
exceeded the expectations of the International Investment Bank for
September 2017, $ 50 a barrel from Brent crude.
According to estimates by Goldman Sachs, data from the United
States, Europe, Japan and Singapore indicate total inventories have
fallen by 83 million barrels since March, indicating demand in the US,
India and China remains strong.
And expects demand to remain strong until the end of this year,
leading to continued rapid withdrawal of oil stocks in the third quarter
of this year.
In a related context, the US government said that stocks of crude
and gasoline in the United States recorded a sharp decline exceeded
expectations last week, and the average refining of crude oil refineries
in the United States about 17.3 million barrels per day last week, an
increase of 620 thousand barrels per day for the same week in 2016.
Brent crude futures closed at $ 52.52 a barrel, after hitting a
two-month high of $ 52.68 a barrel at $ 1.03 or 2.00 per cent at $ 52.52
a barrel.
US benchmark WTI futures rose 67 cents, or 1.37 percent, to settle
at $ 49.71 a barrel, after hitting a two-month high of $ 49.78.
The
benchmark crude oil futures recorded their biggest weekly gain in terms
of the percentage this year, rising more than 8 percent. US energy
companies added 10 oil rigs in July, the lowest monthly increase since
May 2016, Crude amid recent price declines.
The number of oil rigs has slowed as several US exploration and production companies cut capital spending plans.
Baker
Hughes Energy Services said in its closely watched report yesterday
that energy companies added two oil diggers over the week ending July
28, bringing the total number of rigs to 766, the highest since April
2015. With 374 oil diggers active in the same week a year ago.
Power companies have added oil rigs in 55 weeks of the past 61
weeks since the beginning of June 2016. The number of oil rigs is a
primary indicator of future production.
According to Baker Hughes, the current number of oil and gas wells
operating in the United States is 958 compared to an average of 509
last year and 978 diggers in 2015.
According
to federal data, US oil producers are aiming to increase production to
9.3 million bpd in 2017 and to a record 9.9 million bpd in 2018 from 8.9
million bpd in 2016.
