*Osama Suleiman from Vienna
International analysts identified four key factors that increase the chances of crude oil prices rising in the short term including the success of recent US-China trade talks and the possible conclusion of a new international agreement signed by the US and Chinese presidents, in addition to the impact of production cuts, which is implemented by the "OPEC +" alliance, which led to positive results last month.
Factors also include data on the slowdown in US drilling activities, the rigs are shrinking along with the expected wide impact of US sanctions on Venezuela and stopped buying its oil in favor of US refineries.
On the other hand, the international report called to strengthen reserves and raise the efficiency of companies.
Rosneft's report and confirmed that successive developments in the global energy system require companies to make continuous improvements in the level of reserves and accelerate the preparation of oil projects and work to transfer resources to proven reserves while ensuring the level of profitability.
The report stressed the importance of improving success rates in drilling and exploration, which is being taken into account in the Russian Federation, as well as improving production in mature fields and active development of new and promising oil and gas projects.
It pointed out that the growth of Russian oil reserves during the year 2018 by about 4 per cent, compared to 2017.
It pointed out that the growth of reserves is due to the success of exploration operations and the start of development of new field areas and improve the development performance in each of the traditional production areas, including new projects in the fields of eastern Siberia.
The report said that for several years the Russian company seeks to achieve a high position among international companies in terms of the rate of production and reserves realized.
It also focuses on achieving the lowest costs of hydrocarbon exploration and production.
On the other hand, analysts expected the continuation of gains in crude oil prices this week after the conclusion of last week, with a rise of about 3 per cent because of Venezuela's sanctions and US jobs data.
Analysts pointed out that prices are receiving support from good production cuts, led by the OPEC producer alliance and beyond, in addition to the data, which showed a slowdown in US drilling activities in a sign of the supply trend of contraction.
In this context, Ross Kennedy, managing director of QHI Energy Services Group, said to the Economist, Crude prices are moving strongly to recover after receiving support last week of optimism in the success of trade talks between the United States and China, as well as strong adherence to production cuts led by OPEC and independent, which made significant progress last month.
Kennedy explained that the oil market in the light of the previous data on the way to recovery and gained gains, especially with the demonstration of production cuts on their success in moving towards restoring full market equilibrium and addressing supply abundance.
For his part, Marcos Krijg, Senior Analyst at A-Control Oil & Gas Research, explained to the Economist that the market is likely to get better price gains in the current week and subsequent weeks due to factors including signs of slowing US supply, as well as the repercussions of the declaration of US sanctions on Venezuela and the cessation of the import of heavy Venezuelan crude to refineries Gulf Coast US.
Krijg noted that the market is correcting its course after suffering a sharp decline at the end of last year and is receiving the largest support currently from the reductions of the "OPEC +", while broader gains restrain global growth fears as well as data from the China Industrial Purchasing Index.
For his part, Andrei Yaniev, a Bulgarian analyst and energy specialist, said the Economist that the conclusion of the US-China trade talks successfully, and news of a meeting between US President Donald Trump and his Chinese counterpart Shi Jinping as a state of optimism about the global economy, which will translate into more recovery and the rise of oil prices.
Andrei Yaniev noted that the rise in US crude prices to the highest level in two months is indicative of a strong correction of prices, especially with the increasing impact of sanctions on Iran and Venezuela and the tightening of supply led by the alliance, "OPEC +".
It pointed out that the efforts of "OPEC" is widely estimated at the international level.
This success is expected to encourage more countries to join production reduction efforts to restore full market equilibrium.
Oil prices rose 3 per cent at the end of last week, 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 session highs after Baker Hughes Energy Services said, "US oil drilling companies cut the number of active oil rigs for four weeks 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.
Baker Hughes Energy Services in its closely monitored weekly report said that the number of oil drilling active in the United States fell by 15 fossils 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 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 because of 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 oil and gas.
Analysts believe 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 producers from outside agreed in December to renew the agreement to reduce production by 1.2 million barrels per day, compared to the levels of last October, during the first six months of this year.
The decline in oil production by OPEC members in January led by Saudi Arabia, which cut its crude supply 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, to reduce production by about 110 thousand barrels per day last month.
While Venezuela raised its oil production by 50 thousand barrels per day last month to reach 1.27 million barrels per day.
