*Osama Suleiman from Vienna
The International Platts Agency for Petroleum Information stressed the continued state of anxiety in the oil market in the light of uncertainty and the escalation of the impact of geopolitical factors that caused crude oil futures to fall to 17-month lows on Monday amid fears of widespread selling as a result of a sharp drop in equity markets.
The Agency said, "This decline comes despite the confirmation of the ministers of OPEC as they are committed to cutting production that will start in January."
A recent report by the Agency pointed out that the continuous decline in oil prices during the past few weeks may cause concern for many of the ministers of OPEC, as some have reiterated that production cuts could extend beyond June next year if needed.
The report quoted Suhail Al Mazrouei, UAE Minister of Energy, as he said, "if the plan of the Organization "OPEC" and non-OPEC producers to withdraw 1.2 million barrels per day from the market did not succeed, there will always be an option that calls for an exceptional meeting of producers."
He pointed out that if agreed to extend the reduction period, there will be no problem in that.
The report also highlighted analysts' insistence on repeated OPEC members' comments that they were serious about reducing supply and that they could consider further cuts if the market balance does not improve.
This may reassure the market about ending the current bearish cycle.
The report pointed to the role of sudden production cuts in the treatment of the glut of supply in the markets.
It pointed out that the production of Libyan crude oil finally fell by 400 thousand barrels per day as the largest field in the country "El Sharara" is still closed.
The report pointed to the positive data of China's recent oil, which revealed a rise of 6 per cent in its oil imports last October, which is a significant increase in imports of crude oil, which in turn supports the outlook for demand growth in general.
China's crude oil imports rose 17.7 percent year-on-year due to higher purchases.
The report said that US financial markets continue to suffer the large losses seen in the S & P last week.
There are efforts to reassure investors and urge them to remain calm amid a sharp drop in US stock prices over the past week.
The report said, "The Libyan production suffers from vulnerability on the background of political instability and the worsening security situation."
It explained that the average production will reach just over a million barrels per day next year.
However, the risk of civil conflict is unlikely to decline any time soon, where the fields of Elsharara and Elfeel are particularly vulnerable to supply disruption due to chronic fuel shortages and security problems.
The report quoted Fernando Ferreira, a senior analyst at the Rapidan Energy Group, as he said that there are attempts to urge international oil companies to increase their investments in the Libyan oil sector.
There is likely to be increased interest in Libyan projects in 2019.
In this context, John Hall, director of Alpha Energy International Energy, said to The Economist, "The current year saw sharp developments in crude oil prices up and down, which is rising from mid-$ 60 per barrel in the beginning of the year to mid-$ 80 in October. Prices then retreated to a record $ 50 before the end of the year."
He pointed out that the geopolitical risks moved the prices of crude oil significantly throughout the year.
The market was also affected by the high level of oil stocks that led to a large downward wave, where supply and demand interactions were less impactful in prices throughout the year before supply overshadowed by US production in the final months of the year.
In addition, Mavid Mandra, vice president of Austrian energy company LMF, said that the markets are well supplied with no gaps between supply and demand.
He is prompting producers in and outside OPEC to tighten supply by cutting output to boost price growth.
He pointed to the importance of continued coordination between producers and consumers to keep prices at levels appropriate to both sides and to enhance investment activity.
He pointed out that prices have seen some cohesion in the last few days before the start of the holiday, mainly due to speculators' fears that demand may falter in the new year.
He noted that many of the producing countries implement good economic reforms and work to diversify energy resources, therefore, Saudi Arabia and Russia are leading the market towards restoring balance and rising prices to appropriate levels, which will be enhancing the financial capabilities and budgets of producing countries.
Dr. Youssef Al-Shammari, director of Universal Energy Analysis, said, "OPEC is making unique efforts and leading the collective work of producers in cooperation with independent producers to ensure sustainable growth in the market and to prevent imbalance between supply and demand, which could lead to the recovery of the market and prevent the occurrence of sharp rises or decreases that are not in the interest of any of the industry."
He said that the Saudi-Russian partnership will develop and increase its influence in the market, especially during the new year 2019, where a strategic partnership based on integration and cooperation will be launched to support the industry and ensure the treatment of market crises, especially emergency ones, and to compensate for sharp declines in some production countries that suffer from political instability.
With regard to prices, the markets' stopping due to the end of the year especially in Europe and America led to withhold prices that were preceded by quiet transactions before the start of the longest annual leave of the markets throughout the year.
