The "Platts" International Oil Information Agency said that the drop in oil prices pushed - sharply - American refineries to increase purchases of Saudi crude, where the volume of imports is expected to reach about 1.5 million barrels per day during the last week of March, with a sharp increase from 435 thousand barrels per day imported at the end of February and the beginning of March.
The oil prices closed last week, the worst weekly performance since the global financial crisis in 2008, where Brent crude lost 25 percent, and American crude 23 percent, in light of the growing fears of the spread of the Coronavirus and the transformation of Europe into a major focus of the epidemic.
The downward pressure on oil prices was exacerbated by the return of OPEC countries, Russia, and the rest of the independent producers, to abundant production after leaving the OPEC + agreement to reduce production, which led to an increase in the abundance of supply in the markets and the continued decline of prices, but prices received Support after the United States announced stimulus measures for the American economy.
A recent report by Platts explained that oil prices received a good stimulus at the end of the week with the announcement of US President Donald Trump that the US government will take advantage of lower prices and buy "large quantities" of crude to fill the strategic oil reserve, which in turn raised the prices of futures contracts.
He pointed to the rise in futures contracts after the announcement with Brent crude reaching 34.63 dollars a barrel, pointing out that the markets show great risks, as oil futures fell more than 20 percent from last Friday after the market appeared to be on the verge of a significant increase in the abundance of production.
For this part, a report by "Oil Price" suggested that oil prices remain at their current deteriorating levels for months amid efforts by all producers to win larger market shares, while the outbreak of the Coronavirus resulted in a wide weakness in the levels of oil demand.
The report pointed out that the average price of West Texas Intermediate crude is expected to reach $ 30.37 a barrel in the second quarter of this year and $ 37 for the whole year.
He stated that WTI is trading at $ 33 a barrel, relatively high, but it is down 25 percent over the past week due to what is the worst week for oil prices since the financial crisis in 2008.
The report pointed out that after the collapse of the "OPEC +" production reduction agreement, the major banks reduced their forecasts for oil prices, expecting to increase dramatically in the market during the current stage, especially after Saudi Arabia, the UAE and Russia started opening abundant taps, and the producers returning to work individually after collective work faltered. The result of the inconsistency in reducing production and the erosion of previous efforts to try to support price cohesion after the market for four years has been operating under a state of a great coalition of producers.
The report highlighted a warning issued by Goldman Sachs World Bank, which expected the market to witness a level of $ 20 as a price of a barrel of crude oil in the second quarter of this year, and also highlighted similar expectations for the "Standard Chartered" Foundation confirms that the average WTI will reach Only $ 32 a barrel in 2020.
He pointed to Saudi Arabia's pledges to increase the oil market supplies by about 2.6 million additional barrels of crude starting next April, while the UAE pledged to provide an additional one million barrels; which would lead to a total increase of 3.6 million barrels per day in oil supplies from "OPEC" countries. , At a time when global demand is declining sharply due to the outbreak of the new Coronavirus.
The Oil Price report promised that the market is facing a strong wave of declining oil prices as a natural reaction after the sudden end of the "OPEC +" agreement during the faltering ministerial meeting last week in Vienna, noting that Russia, the former ally of OPEC, is preparing for its part. To raise its oil production by 200 to 300 thousand barrels per day in the short term with the possibility of reaching an increase of 500 thousand barrels per day.
The report pointed to the stumbling of many new oil projects and the reduction of drilling activities, especially in the United States, which most of the rock companies cannot cope with the current level of prices at the mid-thirties of dollars, while the cost of production in some of them reaches about $ 50 a barrel or more, explaining Indeed, before the recent Corona crisis, American companies were suffering from difficulties in financing, especially for small producers, which led to an observed slowdown in growth, compared to other previous years in which the “rocky” record reached record levels, especially from the prime field.
Oil prices concluded last week on the worst weekly performance since the global financial crisis in 2008 affected by the outbreak of the Coronavirus, amid fears of slowing demand and expectations of a record increase in supply.
The rare mix of supply and demand shocks has caused the crude market to collapse as producers around the world prepare for an unexpected oil glut in the coming weeks.
Prices rose in transactions last Friday, recovered after the United States and other countries announced plans to support the weakening economies, but Brent crude fell 25 percent over the week, in its biggest weekly loss since the global financial crisis in 2008.
According to "Reuters", "Brent" rose 63 cents, to settle the settlement price at 33.85 dollars a barrel, while West Texas rose 23 cents to close at 31.73 dollars a barrel, and US crude futures fell about 23 percent over the week, which is the largest Her loss in percentage since 2008.
Oil and stock markets drew some support from hopes of a US stimulus package that could ease the economic shock caused by the Coronavirus.
"There is hope that all of this stimulus will bring stability to the economy, relieve some of the concerns about weak demand and keep parts of the economy strong enough to support oil prices," said Phil Flynn, an analyst at Price Futures Group in Chicago.
American energy companies raised the number of oil rigs operating for the fourth week in five weeks, although Exxon Mobil said it would join other producers and reduce drilling operations this year.
Baker Hughes Energy Services reported in its closely watched report that energy companies added four oil rigs last week, bringing the total number of operating rigs to 682, the highest level since December.
This represents a decline of 18 percent, compared to the same week a year ago, when the number of operating rigs was 834.
Exxon, which analysts say occupies most of the US oil rigs, has said it will cut about 20 percent of the 58 rigs it operates in the Permian Basin this year, and the Permian Basin in West Texas and eastern New Mexico is the country's largest oil shale.
In 2019, the number of oil rigs, an early indicator of future production, fell by an average of 208 rigs, after rising by 138 in 2018 as independent exploration and production companies cut spending on new drilling as shareholders sought better financial returns, in light of the situation Energy prices fall.
A Reuters survey concluded that oil prices tend to lie near current low levels in the coming months, as a faltering agreement by producers to limit production harms an already reeling market due to falling demand caused by the Coronavirus.
Analysts in the quick opinion poll reduced their expectations for Brent crude prices, to $ 42 a barrel on average this year, compared to an average of $ 60.63 a month in the February referendum.
It is expected that the average price of global benchmark crude will reach about $ 34.87 in the second quarter and $ 39.05 in the third quarter before recovering some strength and reaching $ 44.08 in the fourth quarter of the year.
Source: Asharqia Chamber