Crude oil prices recorded the biggest weekly loss since last June, with Brent crude falling 5.3 percent and U.S. crude lost 7.4 percent of its value, driven by faltering demand and increased concerns about the rapid spread of the Corona pandemic and its extensive impact on curbing growth global economy.
The fluctuations of the US dollar came to increase the burden on oil prices, which are struggling to remain at levels appropriate for producers and consumers alike, while OPEC + producers continue to restrict oil supply and are preparing for a new review of market indicators during the meeting of the Ministerial Committee to Monitor Production Reduction in the middle of this month headed by Saudi Arabia and Russia.
The Organization of Petroleum Exporting Countries “OPEC” received an apology from Iraq for organizing the celebrations for the 60th anniversary of the founding of the international organization, which was launched in Baghdad in September 1960 due to the health risks resulting from the Corona pandemic, while the organization is preparing for another celebration of the 55th anniversary of the organization’s transition to work. From the Austrian capital Vienna.
In this context, the international oil information agency Platts indicated that crude oil futures prices fell further at the end of last week, with the stability of next month’s contracts near their lowest levels in two months as global demand expectations diminished after the mixed US jobs report.
A recent agency report pointed to a drop in the unemployment rate in the United States to 8.4 percent, indicating that the main job numbers came in line with market expectations, and this may impede further US stimulus efforts.
He stressed that the demand for oil in the United States remains tepid despite the recovery in the labor markets, pointing to the US Energy Information Administration data that showed that the demand for refined products decreased by 13 percent during the week ending on August 29, pointing out that the week The past witnessed the largest weekly decline in crude oil since the week ending April 3, as the US economy at the time witnessed the intensification of closures across the country due to the Coronavirus.
For his part, the “World Oil” report stated that the drop in oil prices came after the deepest decline since last July, with the escalation of concerns about OPEC supplies and fuel demand, noting that Iraq – which is late in the production cut agreement between OPEC and its allies – to reach An extension of two months to implement his compensatory cuts, which indicates that he will not be able to reduce production as quickly as he had previously promised. This comes at a time when members of “OPEC +” will restore some supplies, according to the gradual production cut agreement.
He pointed out that in Europe, the profits of the diesel industry fell at the end of last week to their lowest levels since 2011, indicating that demand is still weak, and the Brent global benchmark index was subjected to broad downward pressure for the first time since last May, and the dollar was affected by futures contracts this week as The rise in the US currency contributed to a decrease in US oil prices by 2.9 percent last Wednesday, after rising to $ 43 a barrel.
He stressed that the oil stumbling came in light of the continuing outbreak of the Coronavirus in many parts of the world, as demand expectations are still uncertain, and that it was affected by the slowdown in purchases of oil by China – the largest importer in the world – especially the smaller refineries, as prices reversed the upward trend since August as a response He acted on the rapid recovery in the dollar’s price over the past days, which weakened the market structure as well.
The report expected a greater discount on West Texas Intermediate crude contracts in the near term due to growing concerns in the market about oversupply, which led to signs of renewed weakness, adding that “in the North Sea region – where supplies determine pricing more than two-thirds of global crude – Traders displayed five shipments last Wednesday after seven shipments for the previous day, and no buyers appeared for any of those shipments, indicating the potential for slowing demand in the region.
He noted the impact of US sanctions on Venezuela’s crude oil exports, which led to the disruption of many tankers loaded with crude oil, including a tanker loaded with 1.1 million barrels of oil anchored off the coast of the country and there is no opportunity to market it due to the sanctions, noting that there are positive indicators in the market, including a recovery Demand for US jet fuel is faster than many other major markets, especially in China.
On the other hand, with regard to prices at the end of last week, crude oil prices fell by more than 3 percent the first day and incurred the biggest weekly loss since last June due to weak global demand and concern about the slowdown in economic recovery due to the impact of the Corona pandemic.
Brent crude lost 5.3 percent on a weekly basis, while US crude lost 7.4 percent, while oil prices fell during trading on Friday and increased their losses until US crude fell to the lowest barrier of $ 40 a barrel, amid the rise of the dollar against most major currencies.
The dollar index rose against a number of major currencies by 17:42 GMT by 0.2 percent, to 92.8 points, and recorded the highest level at 93.2 points, while the lowest level was recorded at 92.6 points.
It should be noted that investors are concerned about the global demand for oil and its derivatives in light of the continuing Coronavirus crisis.
In terms of trading, US Nymex crude futures for October delivery by 17:39 GMT fell by 3.8 percent, to 39.8 dollars a barrel, and the highest price was at 41.8 dollars and the lowest price at 39.7 dollars.
Brent crude futures for November delivery decreased by 2.9 percent, to $ 42.7 a barrel, and the highest price was at 44.5 dollars and the lowest at 42.5 dollars.
Baker Hughes Energy Services said, “The number of oil and gas rigs operating in the United States – an early indication of future production – increased by 2 to 256 in the week ending September 4, and this is the second time in three weeks that energy companies have increased the number of rigs.
Source: Asharqia Chamber