*Osama Suleiman from Vienna
International oil company, Rystad Energy, expects US oil companies to increase spending this year. It noted in the latest reports that 33 oil shale companies would increase investment spending by 8 percent to $ 3.7 billion.
Wood Mackenzie, International Energy Consultancy, has identified several factors to achieve the boom in the crude oil industry in the coming years and the completion of the best projects successfully, as it includes maintaining ample backup capacity through the supply chain, which results in better performance and lower costs. It pointed to the need for continuous work to improve the efficiency of drilling significantly.
A recent report by the company pointed out that the factors include the development of service sector cooperation and harmonization with contracts, in addition to improving project management and address the problems of deflation.
The report stressed the need to achieve greater institutional discipline and the application of more stringent standards that lead to increased attention to the quality of implementation and cost control.
It pointed out the importance of addressing the problem of transition to smaller projects compared to major projects, which were approved between 2009 and 2014.
The report pointed out that the oil and gas industry has faced difficulties-in the past several years-in providing large projects, but the industry began to see signs of improvement. It added, "Despite this improvement and positive developments, there are indications of inadequate implementation of major projects."
The report said that rising prices are boosting new investments, but also in parallel to addressing the problems of weak capital discipline as well as supporting confidence in large-scale projects with a highly efficient budget.
The report stressed the need to continue to control spending and keep costs under scrutiny - no matter how prices have recovered - in parallel with more institutional discipline in the examination of projects and guidance spending.
It pointed out that the commitment to these elements in the past period led to improved performance in the industry as a number of projects have been successfully completed.
According to the report, crude oil industry is on the threshold of a new phase of more complex projects such as deep-water projects in Brazil and land projects in Africa and Kazakhstan, which requires raising the level of efficiency to advanced levels, so that these projects are successfully completed under volatile conditions of the oil market.
The market's fears are fluctuating between supply and demand," said Robert Stehrer, director of the Vienna International Institute for Economic Studies in his speech to the Economist. He pointed out that the fears of demand come due to the war of trade and concern of the economic downturn, as well as the crisis of the collapse of the Turkish currency, which spread to many emerging markets, in addition to the shrinking of stocks, which led to price growth.
Stehrer said supply concerns were driven by the collapse of supply from influential countries, especially as US economic sanctions on Iran approached the energy market in November, which led to the market's perception of the possibility of reaching the stages of inadequate supply, despite the efforts of "OPEC" and independent in increasing production and compensate for the expected shortfall in oil supply.
Fattoria Musaazi, Director of International Relations at Sanam Energy, said, "The second half of this year will see impressive productivity increases from non-OPEC countries, particularly from the US, Canada and Brazil." He pointed out that, according to Bank of America Merrill Lynch estimates, these increases will be effective in curbing the rise in prices. He added, "Infrastructure problems facing US rock production have not significantly limited supply levels, which are increasing significantly despite high costs and bottlenecks."
Markus Krug, chief analyst at oil and gas research firm A-Control, said, "The promotion of long-term private investments is an urgent requirement to secure a better future for industry, especially considering the problem of field obsolescence and natural depletion in the fields in many of the major producers in OPEC and abroad."
Krug believes that the revitalization of investments needs to ensure stability and a sustainable balance in the market through the development of existing and successful cooperation between OPEC and the independent, and the increase in investment spending balanced, especially in view of the prospects for positive growth in demand, especially in the major consuming countries, especially the United States, China and India.
Moreover, Oil prices rose yesterday, despite raising the US oil inventories, as prices were supported by a shrinking of Iran's exports ahead of US sanctions due in November.
Brent crude futures were $ 76.78 a barrel, up 48 cents from the previous settlement, an increase of 0.60 per cent. While West Texas Intermediate crude futures advanced 50 cents to $ 69.03 a barrel, up 0.73 percent.
In the United States, the US Petroleum Institute said, "Crude stocks, gasoline and distillates in the United States all rose last week." Crude inventories unexpectedly increased, while product inventories rose less than expected.
Crude stocks rose 38,000 barrels in the week ending August 24 to reach 405.7 million barrels, while analysts expected a decline of 686 thousand barrels.
"Crude stocks at the delivery point in Cashing, Oklahoma, increased by 130,000 barrels," the oil institute said.
According to API figures, crude consumption in refineries fell 343,000 bpd. Gasoline inventories rose 21,000 barrels, while analysts forecast a 370,000-barrel rise.
Distillate stocks, including diesel and heating oil, rose 982,000 barrels from expectations of 1.6 million barrels, according to the Institute of Petroleum.
US crude oil imports fell five thousand barrels a day last week to reach 8.4 million bpd.
Despite the increase in US stockpiles, dealers confirm that crude prices are receiving some good support from Washington's imposition of sanctions on Tehran that will begin targeting the oil sector as of November.
The research and consultancy firm, Wood Mackenzie, predicts that India is poised to overtake China as the biggest driver of oil demand growth by 2024.
India's demand for oil is set to rise by 3.5 billion bpd from 2017 to 2035, which will account for one-third of the growth in global demand for crude, supported by the expansion of the country's middle class and increased mobility.
In fact, China may soon need less oil. In 2017, the United States overtook the largest importer of crude. "There is no way we can do that," said Succulent Gupta, director of research at Wood Mackenzie, "China is preparing to face a decline in oil demand growth from 2024 to 2035."
Gupta explained that this is the result of two directions, the replacement of alternative energy sources such as electricity and natural gas in need of gasoline and diesel, as a more efficient shipping system and a truck fleet will also lead to weaker demand for fuel.
