*Osama Suleiman from Vienna
Oil prices jumped yesterday near their highest levels this year following a drop in the US crude inventories. The potential loss of Iranian supply is raising concerns about the delicate balance between consumption and production.
Brent futures were up 38 cents at $ 79.47 a barrel, according to Reuters, which is the highest level since late May when the price broke at $ 80.
In contrast, US crude futures rose 92 cents to $ 70.14 a barrel. Thus, the price of the Brent mix has earned $ 25.8 per year, up 48 per cent, when it reached $ 53.8 per barrel on September 12 last year.
Gordon Gray, director of oil and gas market research at HSBC, said, "The fundamentals of the oil market are increasingly supporting crude prices, at least at current levels. While we do not expect Brent to rise to $ 100 per barrel, we see real risks that this will happen. There is already a need for much higher supply than producers such as Saudi Arabia - and the low levels of excess capacity left – as this makes the global system exposed to great exposure to any other major disruptions."
The American Petroleum Institute stated that the US crude inventories fell 8.6 million barrels in the week ending September 7 to reach 395.9 million barrels. And the US Energy Information Administration reduced its forecast for the country's crude production during the current and next year, while raising its forecast for crude prices.
The Energy Information Administration added-in the short-term outlook for short-term energy report-that average US crude production would be 10.66 million bpd this year, down 0.2 percent from last month's forecast.
The US administration also reduced estimates of US crude production in 2019 to 11.18 million bpd, down 1.8 percent from previous estimates.
The Energy Information Administration expects US crude to reach $ 67.03 a barrel this year, up 1.2 percent from August's estimate of $ 67.36 a barrel next year, with an increase of 4.7 per cent from earlier forecasts.
The Energy Information Administration also raised its forecast for the price of Brent crude to $ 72.84 a barrel in 2018, up 1.5 percent from last month's estimate.
Next year, the report said that crude oil prices would hit $ 73.68 a barrel, up 4.4 percent from previous estimates.
The monthly report of the Organization of Petroleum Exporting Countries (OPEC) forecast that demand for crude oil next year would exceed 100 million barrels per day for the first time, and would reach 100.23 million barrels per day.
Again, OPEC has cut its forecast for global demand growth in 2019, considering that risks in the economic outlook tend to decline, which add a new challenge to the organization's efforts to support the market next year.
The Organization of the Petroleum Exporting Countries said world demand for oil next year would increase 1.41 million bpd, down 20 thousand barrels a day from last month's forecast to shrink their forecasts for the second time in a row.
The report added that the demand for oil in the Organization for Economic Cooperation and Development, which has 34 members, has experienced sound growth in all regions of the Organization.
It noted that the demand for OPEC oil in 2018 to reach 32.9 million barrels per day, which is 0.5 million barrels per day less than the previous rate,
It added that the demand for OPEC oil next year is expected to reach 32.1 million barrels per day, slightly less than 0.9 million bpd compared to the previous year.
The production of its 15 oil members increased by 278,000 bpd to reach 32.56 million bpd in August following the June agreement to ease the supply reduction agreement, the group said.
The report showed that global GDP growth forecasts are still at 3.8 per cent for 2018, and 3.6 per cent for 2019. The US growth will remain unchanged at 2.9 per cent in 2018 and 2.5 per cent in 2019, as the Euro zone growth is still at 2.0 per cent for 2018 and 1.9 per cent for 2019.
Japan's GDP growth was adjusted 0.1 per cent to 1.1 per cent in 2018 and 2019, India's growth forecast to reach 7.6 per cent this year, and China's growth will be 6.6 percent in 2018 and 6.2 percent in 2019.
The relatively low price during the past month was mainly due to fears of continuing global trade disputes.
OPEC's monthly report suggested that non-OPEC oil supply growth in 2018 would reach 2.02 million bpd. It added that America, Canada, Kazakhstan, the United Kingdom and Brazil remain the main engine of growth, while Mexico and Norway are expected to show larger declines. The total out-of-OPEC supply is currently estimated at 59.56 million bpd.
The report predicted that the growth of non-OPEC oil supply in 2019 by 2.15 million barrels per day. As Brazil, Canada and the United Kingdom also expected to be the main drivers of growth, while Mexico and Norway remain the biggest declines.
The report bet that non-OPEC supply averaged 61.71 million bpd this year, and 2018 and 2019 expected to grow 0.12 million bpd and 0.11 million bpd, respectively.
The report provides a new indication that the rapid oil's demand that helped OPEC and its allies to manage supply oversupply will slow in 2019, which means less pressure on other producers to compensate for the lost supplies of Venezuela and Iran as the implementation of renewed US sanctions.
OPEC stated, "The growing challenges in some emerging and developing economies are tending to the current risks in the outlook for global economic growth as well as the decline. The escalation of trade tensions and the implications of further monetary tightening by the four large central banks as global debt levels grow are all additional concerns."
In a related context, Torsten Andrebu, Honorary Secretary General of the International Gas Federation, said to the Economist that the demand growth for natural gas exceeds other traditional energy resources and is aided by sustained progress in energy efficiency levels.
He noted that there is tremendous technological progress in the transport sector in the fields of land and sea, and will rely on natural gas in a central and major.
Andrebu noted that there has been a steady rise in pipeline investment and infrastructure for LNG projects, which was raising the expectations of many international gas companies that gas will become the main source of energy by 2026.
Moreover, David Ledesma, an analyst at South-court Energy, told the Economist that the peak demand for crude oil can not be accurately identified, but some international reports, such as issued by the company, " Carbon Tracker," bet that this peak may occur sooner than expected in the next five years.
In contrast, there are other expectations for international organizations and companies that confirm that demand for oil will grow due to emerging markets and possibly continue to 2040.
Ledesma believes that no matter how different expectations, there is an important thing that enjoys the consensus of all, which is the need to quickly shift towards cleaner energy and avoid geopolitical risks in reliance on conventional energy.
He pointed out that even the economies of emerging countries - which are seen as the axis of demand-take into account renewable energy resources, and seek to increase reliance on them.
Furthermore, Marcos Krojg, chief analyst for oil and gas research at E-control Company, said to the Economist that the US sanctions on Iran and the US administration's attempt to drop the level of Iranian oil exports to the zero level cast a heavy shadow on the markets, and deepen the uncertainty. This would lead to higher prices and approaching the level of $ 80 a barrel because of fear of short-term supply crises, and fueled fears that the decline in US stocks.
"Concerns will also increase for consumers as prices rise on record," he said. The rise could also limit many levels of demand. Therefore, the United States has again urged major producers to accelerate production quickly amid a welcome and quick response from Saudi Arabia and Russia.
The producers' meeting in December is expected to result in significant increases to ease these fears, support the balance between supply and demand, and overcome the fallout from production declines in a number of influential producers.
