*Osama Suleiman from Vienna
The technical committee of experts in charge of monitoring and follow-up of oil production in Vienna will meet tomorrow to discuss the situation of the oil market in the light of the abundance of supplies that dominate it.
It is also looking at the best alternatives available after reviewing the production situation in 25 member countries in the joint declaration of OPEC countries and abroad.
The report of OPEC indicates that the technical committee will raise its recommendations to the ministerial meeting on the next day of the monitoring committee, which was chaired by Saudi Arabia and Russia, in order to put before them the latest data and assessments of the situation of the market and different views on the best deal with the current situation in the market after the exposure of a sharp downward wave, which lost prices about 20% over two months.
It noted that the good intentions of producing States were inadequate, and it must be supported by work.
It also noted that this will be the focus of all ministerial meetings of the Monitoring Committee of the Declaration of Cooperation, which is a mechanism for monitoring implementation and compliance with adjustments in production levels.
The report pointed out that the next meeting of the Committee in Vienna will emphasize the need to develop the role of the Commission in the pursuit of market variables and the transition from strength to strength while working to bring about an evolution in the way of work and follow-up.
It added that the meeting of the Ministerial Committee has become a dynamic forum reflects the strength of cooperation between OPEC and its partners.
It pointed out that the Committee includes energy ministers in four OPEC member countries, namely Saudi Arabia, Kuwait, Algeria and Venezuela, along with two non-OPEC members, Russia and Oman.
The report said that after the two meetings of the Technical Committee today and the Ministerial Committee tomorrow will be announced the monthly report, which includes the levels of universal conformity of the countries participating in the Declaration, as well as prospects in the global oil market in the short term.
The report said that the continuous announcement of the levels of conformity on a monthly basis allows rapid progress in achieving stability and improving the status of market fundamentals.
It pointed out that the Ministerial Committee is already a forum for OPEC countries and partners to monitor and discuss the developments of the market closely.
The report said that the last two meetings of the Ministerial Committee in Algeria and Abu Dhabi emphasized their recommendations to further study production options in 2019 and expectations of evolution in the industry by addressing the abundance of supply and eliminating the re-emergence of a state of market imbalance.
It pointed out that the holding of technical and ministerial meetings in different capitals and cities alternately contributed to the rapprochement and understanding among the member states of the agreement.
It noted that the Vienna meeting was the twelfth ministerial and technical meeting, respectively.
The report said that the Technical Committees will remain a sustainable tool to help stabilize the oil market and stimulate work so that participants in the Declaration of Cooperation achieve all their goals.
Oil analysts expected oil prices to continue to fluctuate this week after sharp losses over the past month, with Brent crude losing 20 per cent and hitting a 10-year low.
Analysts said prices would be supported by the upcoming OPEC ministerial meeting and beyond. A decision is likely to be reached on addressing the oversupply of dominant supply over the past few months.
Dan Bosca, chief analyst at British bank UniCredit, said that producers are on the verge of a potential reduction in production levels for the new year 2019, which is likely to result in Thursday and Friday meetings.
He noted that Russia has shown flexibility in its positions and willingness to participate with OPEC in production cuts, which is positive on the market.
He noted that the successful talks brought together the Saudi Crown Prince Mohammed bin Salman and Russian President Vladimir Putin on the sidelines of the G20 meeting in Buenos Aires will have a positive impact on the success similar to the meeting of OPEC, especially as it addressed the coordination of productive policies between the two largest producers of crude oil in the world.
Furthermore, Dr. Nagenda Komandantova, chief analyst at the International Institute of Energy Applications, said to the Economist that the uncertainty continues to dominate the market, as the price volatility is likely to wait until OPEC producers and outside producers are resolved to cut output during the technical and ministerial consultations in Vienna this week.
She noted that US production cannot continue at this current high pace, especially in the light of the losses of 21 percent in less than two months in addition to the high level of US stocks.
She said that the decision to reduce the expected production will support prices and may encourage US production to maintain the pace of supplies fast and high.
For his part, Andrei Yanayev, energy expert and Bulgarian analyst, explained to the Economist that the meeting of ministers in OPEC on Wednesday is a detailed meeting and has a wide impact on price levels and the stability of the market in general, especially in view of expectations of effective decisions to reduce production to stop price losses and to address the state of abundance of oil supplies.
Yanayev said the market was in a near-2014 crisis after Brent crude hit the worst monthly performance since the global financial crisis in 2008.
He pointed out that the cooperation of producers has gained extensive experience over the past two years and achieved a high degree of coordination and understanding between the OPEC countries and beyond, which qualifies them to overcome the current circumstances and overcome past crises.
Oil prices fell at the end of last week on concerns of oversupply and the dollar's rise, but expectations that OPEC and Russia will agree to a reduction in crude production next week to curb the losses.
The benchmark crude, the Brent crude produced from the North Sea and the US Light crude, recorded the weakest monthly performance in more than 10 years in November and falling by more than 20 per cent as global supply exceeded demand.
According to "Reuters", Brent contracts closed to a close of 80 cents, or 1.3 per cent, to settle at $ 58.71 per barrel, while US crude fell 52 cents, or 1 percent, to $ 50.93 a barrel.
According to the Ministry of Energy of Russian Federation, the Energy Minister Alexander Novak met with his Saudi counterpart Khalid al-Faleh on the sidelines of the G20 summit in Argentina to discuss oil production cuts in 2019.
Novak said that Russia's oil production in 2019 is expected to remain at its own level this year, but may be adjusted according to an agreement between OPEC and non-OPEC producers.
A significant increase in oil production in the United States, Russia and some OPEC members, which is dominated by producers in the Middle East, are filling global stocks and creating oversupply in some markets.
The US Energy Information Administration said in a monthly report that the average US crude production rose by about 129 thousand barrels per day in September to a new record of about 11.5 million barrels per day, a slowdown in oil demand growth is exacerbating the emerging supply gap.
On the other hand, US energy companies added oil excavators for a third week in four weeks.
The total number of active excavators rose for the fifth month in a row, although crude prices fell to their lowest level since October 2017.
Baker Hughes Energy Services said in its closely watched weekly report that the oil drilling companies added two diggers in the week ending 30 November, which is bringing the total number of drilling rigs running to 887.
Over the course of the month, the total number of rigs increased by 12, the same increase recorded in October and a fifth monthly increase, respectively.
The total number of active oil drillings, a preliminary indicator of future production, is higher than a year ago when it reached 749 diggers, as energy companies increase spending this year to boost production to take advantage of crude prices in 2018 higher than 2017.
The US Energy Information Administration reported that the monthly average of US oil production reached an all-time high of 11.5 million barrels per day in September, which is reaching a record high for the fourth consecutive month.
