Oil analysts say the Organization of the Petroleum Exporting Countries (OPEC) is still determined to hold on to reduce oil supplies to correct the supply gap, which occurred at the end of last year with the revival of prices due to the sudden decision by Washington to grant exemptions to eight countries to buying Iranian oil.
Analysts expect crude prices to continue their price gains this week after concluding last week with the fourth weekly gain of Brent crude and seventh weekly gain of US crude and Brent prices remained around $ 72 a barrel.
They assert that prices receive strong support from production cuts, which has been implemented by the OPEC + alliance since the beginning of the year that reduces oil supply by about 1.2 million bpd and led to gains of around 30 per cent in the first quarter.
Analysts added that the factors supporting the rise in prices include a slowdown in drilling activities in the United States, in addition to the worsening impact of US economic sanctions on Iran and Venezuela, which led to the collapse of production in the two countries.
This coincided with voluntary reductions in Saudi production, which was the main factor in getting rid of the abundance of supply in the markets and treating the high level of US stocks, in addition to concerns about the stability of oil supplies from Libya in the light of the volatile political situation in the country.
Analysts pointed out that the market is waiting for May 2nd, which will announce the US administration's position on the renewal of concessions to the eight buyers of Iranian crude.
This comes at a time when Japan has stopped making any new deals with Tehran in order to maintain its relationship with the United States and wait for the final position on concessions.
Robin Noble, the director of Oxera Consulting LLP, said that oil prices have recorded record gains in recent months and are likely to continue to rally due to current market data, which supports the rise in prices, especially the reduction of production by the Producers Alliance and the impact of economic sanctions, the slowdown of US drilling activities and the decline in fears over economic growth.
He explained that the US administration will continue to pressure Iran to stifle production to zero, so Washington urged producers in OPEC and abroad to increase production.
For his part, Robert Stehrer, Director of The Vienna Institute for International Economic Studies, said to the Economist that oil prices are already at a five-month high with gains that continued in the second quarter, especially with the insistence of OPEC to adhere to the reduction of oil supply to correct the supply gap, which occurred at the end of last year due to the sudden decision by Washington to grant exemptions to eight countries buying Iranian oil.
He said that the suspension of concessions to Iranian oil buyers will undoubtedly push prices to around $ 80 a barrel.
In addition, David Ledesma, an analyst at British energy consultancy South-Court, said that the gains of oil during the past week were limited by holidays and quiet trading.
But, prices managed to keep pace with the gains for the fourth week for Brent crude and the seventh week of US crude.
He told the Economist that it is expected to continue the strong movement of prices in the current week after a relative calm due to holidays in Europe and the United States.
He said that prices are receiving support from falling Saudi exports to less than seven million barrels per day in February, in addition to the decline in US stocks.
In turn, Marcos Krug, Senior Analyst for Oil and Gas Research at I-Control, said to the Economist that the reduction of US drilling platforms by about eight rigs last week has helped to boost the price gains for two consecutive weeks.
The gains are likely to continue in light of strong expectations of a contraction in US oil supplies.
"The crisis of Venezuelan production has an important role in raising the price level in the light of severe sanctions from the US side on the export of Venezuelan oil despite the need for markets for this kind of heavy oil," he said.
He pointed out that Venezuela is working to overcome these difficulties through the export of Venezuelan crude through Russia, where Venezuela insists on defying and avoiding US sanctions through the transfer of oil through Russian giant Rosneft.
According to sources and documents, Venezuelan President Nicolas Maduro is diverting liquidity from oil sales through the Russian energy company Rosneft, while seeking to avoid US sanctions aimed at overthrowing him from power.
Oil sales through Rosneft are the latest sign that Venezuela's growing dependence, which suffers from lack of liquidity on Russia, while the United States tightens financial restrictions on Maduro, whom he describes as a dictator.
As the economy languishes under years of stagnation and a sharp drop in oil production, Venezuela is struggling to finance imports and government spending before Washington imposed strict restrictions on state-run PDFSA in January.
Oil accounts for more than 90 per cent of the OPEC member's exports.
It also represents the lion's share of government revenues.
Maduro accused US President Donald Trump of launching an economic war against Venezuela.
Since January, Maduro has been holding talks with allies in Moscow on ways to circumvent customers paying BDSFA in dollars, the sources said.
Russia has publicly said US sanctions are illegal and will work with Venezuela to avoid them. Under the Venezuelan-Russian plan, BDSA began to pass its oil sales bills to Rosneft.
According to documents and sources, the Russian company for its Venezuelan counterpart BDSA will immediately pay a discount on the selling price to avoid the usual framework for completing oil transactions, which ranges from 30 to 90 days, as it will get the full amount later from the buyer.
The documents show that he asked major energy companies such as India's Reliance, the largest cash-paying customer of BDSA, to participate in the plan to pay Rosneft for Venezuelan oil.
Oil prices ended last week's trading closing to $ 72, which was taking advantage of the decline of Iranian and Venezuelan crude oil flows to the global market and the continued decline in Saudi exports, coinciding with the decline in the number of American drilling rigs.
As the markets closed today for a public holiday in the markets of Europe and America, according to Bloomberg data, the price of Brent crude oil rose 0.49 percent to $ 71.97, which is coming close to a five-month high of $ 72.27 on Wednesday.
Since the beginning of the week, Brent has risen 0.6 per cent, its fourth weekly gain in a row.
According to Reuters, US benchmark West Texas Intermediate crude futures rose 24 cents to hit a barrel at $ 64 to end the week on an increase of about 0.2 per cent, in seventh consecutive weekly gain.
Official data showed that Saudi Arabia's exports in February fell 277 thousand barrels per day, compared to the previous month.
The world's largest oil exporter shipped 6.977 million barrels per day, down from 7.254 million in January.
US Energy Information Administration data showed that US inventories fell last week as imports plummeted, while inventories of gasoline and distillates fell.
Crude stocks fell 1.4 million barrels in the week ending April 12 to 455.15 million barrels, contrary to analysts' expectations, which indicated an increase of 1.7 million barrels.
US net crude imports last week fell 659,000 bpd to 3.59 million bpd.
Crude oil inventories at the delivery center in Cushing, Oklahoma, fell 1.54 million barrels, the Energy Information Administration said.
The data showed that the consumption of crude refineries fell 22 thousand barrels per day, and operating rates of refineries rose 0.2 percentage points.
Gasoline inventories fell by 1.2 million barrels, while analysts' forecasts showed a 2.1-million-barrel decline.
Distillate stocks, including diesel and heating oil, fell 362,000 barrels, while expectations were for a drop of 846,000 barrels.
US energy companies cut the number of oil-powered drilling rigs for the first time in three weeks, as expectations for production growth in the country's largest oil fields continue to contract.
Baker Hughes Energy Services, in its closely monitored weekly report, said that drilling companies have stopped the operation of eight oil excavators this week, which is bringing the total number to 825.
The total number of active oil rigs in the United States remains a preliminary indicator of future production, which is slightly higher than its level a year ago when there were 820 diggers running.
The number of rigs has declined over the past four months and production growth in Permian Basin and other major shale oil basins has slowed with crude prices falling in the fourth quarter of last year and a large number of independent oil companies to reduce spending, in the face of pressure from investors to focus on profit growth instead of increasing production.
According to Baker Hughes, the total number of active oil and gas rigs in the United States since the beginning of the year was 1039, with the highest annual average since 2014 at 1862, as most of the excavators produce both oil and gas.
