Business News Details

Despite the control of the uncertainty on the markets .. 4 factors restore oil prices to rise
27/01/2021

Crude oil prices rose yesterday, due to four factors, which were optimism about US fiscal stimulus plans and expectations of shale oil contraction, in addition to OPEC + efforts to restrict oil supply, especially after the Saudi voluntary cuts that amounted to one million barrels per day in addition to the impact of accelerating vaccination with new Corona vaccines. In different countries of the world.
Achieving more price gains is resisting the decisions of multiple governments to adhere to the general closure to besiege new infections and limit the rapid spread of the Corona epidemic in light of the new strains, which deepens fears of the chances of a recovery in demand in light of the escalation of the peak of the current crisis.
Specialists and oil analysts told Al-Eqtisadiah that OPEC + producers are preparing for a new monthly meeting in early February to review market data and check the latest supply and demand data and stocks in light of OPEC + fixing production at the January level. This time, pointing out that there are good commitment and compliance from most producers, especially Russia, the largest producer outside of OPEC, as it is expected that Russian refineries will maintain low productivity in February, as economic factors remain unfavorable, and productivity increases are likely to begin in February, Economic factors remain unfavorable and productivity increases are likely to start in March as demand for products increases.
In this context, Sevin Schimmel, director of the German "VG Industry" company, says that the uncertainty of the recovery of demand and the global economy still dominates the markets and led to a decline in crude oil futures due to fears related to the epidemic, noting that the price gains due to the reduction in supply are not Long withstanding the pressures of the pandemic and the uncertain prospects for a recovery in demand.
And he considered that the continuity of the general closure in Europe and its recent extension to many Chinese cities has exacerbated the concerns over a demand that strongly dominate the market, but on the other hand, we find effective government measures, on top of which is the US financial stimulus plan that can revive the global economy in light of this gloomy and expanding atmosphere. With the emergence of new strains of the Corona epidemic and their spread in many countries of the world.
Robin Noble, director of the International Consulting Company, Oxyra, believes that the price increase is renewed from time to time due to the American stimulus, the spread of new vaccines, and the continued success of "OPEC +" in restricting the oil supply in addition to the expected recession in the US supplies of crude oil due to the direction of the new US administration strongly biased. To renewable energy, which trimmed many of the gains made by fossil fuels under the previous US administration
He pointed out that "OPEC +" confirms in every meeting the ability of the alliance to maintain unity and cohesion and work to achieve a balance between supply and demand in the markets in light of the escalating pace of the Coronavirus crisis, pointing to the conviction of the market and all industry parties of the ability of the "OPEC +" alliance to achieve Intervening decisively in times of crisis in the interest of supporting market stability and the prosperity of the industry despite all challenges.

Moahi Kwassi, managing director of the international "Aggracraft" company, points out that the survival of "OPEC +" as a united front to combat the negative impact of the epidemic on demand is a very important achievement and will be the main engine towards the full recovery of crude oil markets, which many hope will take place this year.
She noted that many are optimistic about the acceleration of withdrawals from surplus US oil stocks, referring to data issued by Standard & Poor's that suggest a decline in stocks by 1.7 million barrels to about 484.9 million barrels, which is expected to be confirmed by the American Petroleum Institute data this week.
On the other hand, and concerning prices, crude oil prices rose about 1 percent yesterday, supported by optimism surrounding the fiscal stimulus plans in the United States and concern about supplies, but concerns about demand raised by a new wave of general isolation measures to contain the Coronavirus restricted the gains.
Brent crude futures, the world benchmark, ended the trading session up 47 cents, or 0.9 percent, to settle at $ 55.88 a barrel, while US benchmark West Texas Intermediate crude futures closed 50 cents, or 1 percent, higher at $ 52.77 a barrel.
Petro Logistics, which specializes in tracking oil tankers, said on Monday that the compliance of the Organization of the Petroleum Exporting Countries (OPEC) and its allies with production cuts in January averaged 85 percent.
The data suggests that the group, known as "OPEC +", has improved its adherence to supply curbs it has pledged. On the other hand, European countries imposed tight restrictions to stop the spread of the Coronavirus, while China announced an increase in new infections with the virus, which cast doubts on the outlook for demand in the largest energy consumer in the world.
Barclays Bank raised its oil price forecast for 2021 but said that the increase in HIV infections in China may contribute to price declines in the short term.
Besides, the OPEC crude basket rose, and its price reached 54.85 dollars a barrel yesterday, compared to 54.69 dollars a barrel the previous day.
The daily report of the Organization of Petroleum Exporting Countries (OPEC) said yesterday that the price of the basket, which includes average prices of 13 crudes produced by OPEC member states, achieved the first increase after several previous declines, and that the basket gained about one dollar compared to the same day last week, in which it recorded 53.92 dollars per barrel.

Despite the control of the uncertainty on the markets .. 4 factors restore oil prices to rise