The report of the "Petroleum Economist" stressed that the bulk of OPEC's weight is derived from Saudi Arabia, which ranks first in crude oil production, where it enjoys great stability and ambitious plans for development and economic diversification in accordance with Vision 2030.

The international report considered that the influence of "OPEC" has increased significantly in the market in the last two years when the partnership with non-OPEC countries, and the plan of action and collective action was announced in the OPEC + alliance.

It added that the new alliance is the largest gathering of producers in the history of the market, especially as it includes Russia and Kazakhstan, two of the largest producers outside OPEC.

It pointed to the Alliance's adherence to the success of the Convention on the reduction of supply through the agreements that were approved in Vienna at the end of last year.

It explained that the Organization of Petroleum Exporting Countries "OPEC" and its allies led by Russia are facing unprecedented challenges under the current market conditions.

It pointed out that the producers' alliance is fully convinced and insisting that the production cuts implemented earlier this year are sufficient to restore the market balance and capable of preventing the continuation of the abundant supply of world oil in the markets.

The report said that fears of global growth cast a shadow on the world oil markets and prompted many banks and international financial institutions to reduce their price forecasts this year.

Goldman Sachs cuts its price forecast from $ 70 a barrel to $ 62.5 a barrel due to the impact of concerns growth and the American production boom, especially shale oil.

The report stressed that "OPEC" will not be less influential in the market than it was before.

It pointed out that it still accounted for more than 40 per cent of the world's oil supply compared to 53 per cent in the 1970s.

Petroleum Economist pointed out that consumers benefit from a drop-in energy price.

It said that the resort of producers to reduce production to revive the prices necessary for the survival of industry in the case of attracting investment in addition to the need to remain investment in a state of continuous recovery to overcome the problem of natural depletion and gradual existing fields.

The report said that Russian production recorded record increases in 2018 about 11 million barrels per day, despite its commitment to the agreement that "OPEC" is going to reduce production by about 300 thousand barrels per day.

It added, "In the first ten months of 2018, Russian output grew to 11.1 million bpd in October so far production has exceeded the previous historic maximum of 11.4 million barrels per day recorded in October 2016 before reaching the deal "OPEC" directly."

The report noted that the growth of Russian production in 2018 was driven by OPEC's decision in June to increase production by about 1 million barrels a day to compensate production losses in Venezuela, Iran, Mexico and Angola, which led Russia to accelerate the launch of new projects and a heavy supply of crude.

According to the report, the hopes are on the countries of the Middle East, which are expected to lead a major breakthrough of major new discoveries potential in oil and gas.

It pointed out that these discoveries will lead to a significant increase in production, despite the continuation of many of the unrest and geopolitical factors in the region, but 2019 will be a year out of any accounts in new explorations.

For example, the report says, "It can be said that the Sultanate of Oman will go to more gas production flows."

It pointed out the cooperation of two global companies, namely BP and ENI in the exploration of gas in the project of the successful reservoir.

It also noted the existence of huge discoveries of gas in Egypt through the field appeared and soon in the Sinai Peninsula.

Oil prices rose 3 per cent at the end of last week, which was backed by strong job data in the US and signs that US sanctions on Venezuelan exports have helped to reduce the supply of crude.

Prices were also supported by data showing that oil drilling companies in the US reduced the number of oil rigs this week.

According to "Reuters", Brent crude ended the session high of $ 1.91, or 3.14%, to settle at $ 62.75 per barrel, and ending the week on gains of about 2 per cent.

US benchmark WTI futures rose $ 1.47, or 2.73 per cent, to settle at $ 55.26 per barrel, extending its gains throughout the week to 3 per cent.

Oil prices jumped to a session high after Baker Hughes Energy Services said, "US oil drilling companies cut the number of active oil rigs for a fourth week in the past five weeks, with some drilling companies implementing plans to reduce spending on new wells this year."

Last week's data showed that the number of rigs in January recorded the biggest monthly decline since April 2016.

In its weekly closely monitored report, Baker Hughes Energy Services, reported that the number of active oil drillings in the United States fell by 15 in the week ending February 1, which is bringing the total number of rigs to 847, the lowest level since May 2018.

The number of oil drilling rigs in America, a preliminary indicator of future production, is much higher than a year ago when it reached 765 diggers, after energy companies boosted spending in 2018 to take advantage of higher crude prices that year.

But some oil drilling companies said, "It plans to stop the operation of excavators in 2019, partly due to expectations of lower crude prices than last year."

According to the Baker Hughes report, the number of oil and natural gas rigs active in the United States this week is 1045, and most of the excavators produce both oil and gas.

Analysts believe that the oil market will be more balanced in 2019 after OPEC supply cuts.

A recent survey showed that production of the Organization of Petroleum Exporting Countries OPEC fell at the highest pace in two years during the first month of this year.

The results of a survey conducted by the agency "Bloomberg" showed that the production of OPEC members of 14 countries currently declined by about 930 thousand barrels per day in January to drop to 31.02 million barrels per day.

Members of OPEC and outside producers agreed last December to renew the 1.2 million barrels per day (bpd) reduction agreement, compared to the levels of last October, during the first six months of this year.

The drop in OPEC oil production comes in January, led by Saudi Arabia, which cut its crude supplies by about 450,000 bpd in January to 10.2 million bpd, according to the survey results.

The UAE is second in the list of the most reduced production that to reduce production by about 110 thousand barrels per day last month.

While Venezuela raised its oil production by 50 thousand barrels per day in January to 1.27 million barrels per day.

Source: Asharqia Chamber

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