The accelerated withdrawal from stocks increases the odds of oil remaining...

The accelerated withdrawal from stocks increases the odds of oil remaining...
The accelerated withdrawal from stocks increases the odds of oil remaining...

The natural gas crisis and the acceleration of the substitution of crude oil as an alternative to gas have largely supported the recovery of global oil demand, with continued supply constraints, whether from the “OPEC +” group or outside it.
Crude oil prices recorded new gains during their weekly trading, as Brent crude maintained a level above $85 a barrel and gained 1 percent to record the seventh weekly gain in a row, while US crude gained 1.5 percent and recorded its ninth weekly gain.
In this context, the international “Platts” agency for oil information stated that the rise in crude prices follows their slowdown relatively earlier, after the expectations of demand in the near term were clouded due to the slowdown in manufacturing growth in the United States and Europe.
A recent report by the agency, citing international analysts, indicated that signs of slowing economic growth in the United States and Europe, along with rising global energy prices and the return of epidemic restrictions in Russia, added uncertainty to the expectations of oil demand in the near term, although long-term expectations Still optimistic.
He pointed out, quoting TD Securities, confirming that energy markets are under pressure, which reflects the turbulence of demand expectations, while the scale of energy supply risks remains constant, pointing to the Russian government’s announcement last Thursday that strict restrictions against the epidemic will be implemented in the capital, Moscow, in light of the high numbers Cases and deaths there.
The report, quoting analysts, indicated that the medium-term outlook for oil prices is good and is still mainly bullish, but we may witness a slight decline during the next week.
The report highlighted the US National Oceanic and Atmospheric Administration’s expectations that this year’s winter will be milder in large parts of the United States, which will reduce energy consumption, and the decline in coal and gas prices has increased selling pressure, causing a slight decrease in oil prices in trading. daily.
He pointed out that the coal market also declined in the wake of China’s announcement of measures to combat high energy prices, which may slow the transition of fuel to oil, and at the same time, US crude oil production is expected to witness a boost in the coming weeks, due to the suspended restart of the “Shell” facility. In the Gulf of Mexico, Shell also announced that it expects to resume operations at the facility in early November, ahead of market expectations for a restart in December.
He explained that the facility was damaged by Hurricane Ida, which made landfall in southeastern Louisiana on August 29 as a category 4 hurricane, noting that the latest data of the US Energy Information Administration showed that the average US crude oil production amounted to 11.3 million barrels per day in At the end of the week ending on October 15, it is still less than pre-Hurricane Ida levels by about 200,000 barrels per day.
The report quoted Commerzbank, confirming the fact that the oil supply situation is still tight and resisting any further decline in prices in the oil market, explaining that the continuation of the rapid withdrawal of stocks and the reservation of the “OPEC +” countries regarding the increase in production will make Brent crude prices maintain the level of 85 dollars per barrel until the end of the year.
On the other hand, the Organization of the Petroleum Exporting Countries, OPEC, stated that oil and gas will continue to play an important role in global energy supplies in the medium and long term, and that meeting the increasing energy requirements will depend on the continuous flow of industrial investment.
“Industrial investment will also be necessary to advance innovation and technology that will be instrumental in further improving the environmental footprint and reducing emissions”.
The report pointed out that the high-level workshop was chaired by Muhammad Barkindo, Secretary-General of OPEC, Joseph McMonigle, Secretary-General of the International Energy Forum, and Keisuke Sadamori, Director of the Office of Energy Markets and Security at the International Energy Agency. More than 110 participants participated in the workshop.
Barkindo explained that the current stage requires more close cooperation between the three international bodies in the coming weeks and months, as the industry continues to rise to the challenge of adapting to the paradigm shifts currently taking place.
The Secretary-General noted that there are only days left until the United Nations Climate Change Conference COP26 in Glasgow, considering investment as one of the critical issues for the industry in the coming years.
For his part, the Secretary-General of the International Energy Forum warned of concerns about energy investment, noting that global demand is recovering after the Corona epidemic, but private sector investments have not responded sufficiently so far.
He pointed out that this may lead to price fluctuations that will affect market stability and impede a sustainable and comprehensive recovery from the epidemic, noting that the complex physical and financial energy market dynamics have been better understood and organized in a more transparent and efficient manner since the three organizations launched the dialogue, in response to the global financial crisis. More than a decade ago.
“Discussions of the work program of the three organizations provided greater insight into market dynamics and will help producers and consumers assess whether further concerted action is warranted,” he added.
For his part, Keisuke Sadamori, an official at the International Energy Agency, stressed that the world is not investing enough to meet its future energy needs, and the gradual recovery of spending related to the energy transition is still far less than what is required to meet the increasing demand for energy services in a sustainable manner.
He stated that what is currently being spent on oil is geared towards a world marked by stagnation or low demand, where increased spending on clean energy transitions provides the way forward, but this must happen quickly as global energy markets are likely to be volatile for years to come.
“An efficient and orderly transition will be critical not only to reach international climate targets, but also to prevent dangerous supply disruptions and destabilizing price volatility along the way,” Sadamuri added.
The OPEC report stated that the eighth workshop sessions focused on investment opportunities in the oil industry in light of recent trends in the global economy and financial markets, which provided an overview of how investors across different asset classes deal with investment in energy, and how this translates to the prospects for oil markets. .
He noted that the workshop also discussed the impact of the accelerating trend towards environmental, social and corporate governance (ESG) in investing in exploration and production activity, noting that the joint workshop is part of the work program developed by the three organizations and approved by the energy ministers at the 12th International Energy Forum in Cancun, Mexico in March 2010.
On the other hand, with regard to prices at the end of last week, oil traded on Friday at rates slightly lower than its peak in several years, as a result of the upward trends regarding declining supplies that were limited by concerns expressed by world leaders about the possibility of the demand disruptions resulting from the Corona pandemic not ending.
Brent crude futures rose 92 cents, or 1.1 percent, to close at $85.53 a barrel, and Brent benchmark crude reached its highest level in three years on Thursday, when it recorded $86.10, and it rose 1 percent during the week, achieving a rise for the seventh week.
US West Texas Intermediate crude futures rose $1.26, or 1.5 percent, to settle at $83.76 a barrel, close to a seven-year high recorded this week.
This index rose 1.7 percent during the week and rose for the ninth week in a row, and prices were boosted by concerns about coal and gas shortages in China, India and Europe, which prompted some power generation companies to switch from gas to fuel oil and diesel.
Winters in most parts of the United States are expected to be warmer than average, according to the National Oceanic and Atmospheric Administration’s forecast. And the position of US crude strengthened this week as investors looked at lower crude stocks at the Cushing Oil Storage Center in Oklahoma.
US Energy Information Administration data on Wednesday showed crude stocks in Cushing fell to 31.2 million barrels, their lowest level since October 2018.
On the other hand, the “Baker Hughes” report on US drilling activities indicated that the number of oil and gas rigs in the United States decreased by one rig this week, as the total number of rigs is currently 542, an increase of 255 from this time last year, but still less than 790 Active platform as of March 2020.
The report also pointed out that the number of US oil rigs decreased this week to 443 – a decrease of two – after six consecutive weeks of additions, the number of gas rigs increased by one platform, and the various rigs remained the same.
The report noted a decline in the Energy Information Administration’s estimates of oil production in the United States for the week ending on October 15, by one hundred thousand barrels per day to 11.3 million barrels per day, after rising five weeks from the previous five weeks.
He added that “a decrease in the total number of rigs in Canada was detected by four, as the number of active oil and gas rigs in Canada now reached 164, an increase of 85 over last year.”
The report stated that there was an increase in the number of rigs in the Permian Basin again this week by the amount of one digger, while the number of rigs in Eagle Ford remained the same, explaining that the total number of rigs in the Permian is now more than 135 rigs than it was at this time last year. .

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